The Real Business Cycle Theory Asserts That Output Can Vary

question 27

Multiple Choice

The real business cycle theory asserts that output can vary significantly over a business cycle even if real wage rate changes are relatively small because

• A)labor supply is very responsive to permanent wage rate changes
• B)people are willing to substitute leisure intertemporarily
• C)firms will adjust their output immediately by laying people off
• D)even small changes add up after a while
• E)workers spend their wage increases right away

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Definitions:

Three-Domain System

A classification system in biology that divides cellular life forms into three domains: Archaea, Bacteria, and Eukarya.

Molecular Data

Information at the molecular level, including structures, sequences, or any data related to the molecular composition and interactions within biological or chemical entities.

Prokaryotes

Single-celled organisms that lack a nucleus and other membrane-bound organelles, generally including bacteria and archaea.

DNA Ligase

Enzyme that links DNA fragments; used during production of recombinant DNA to join foreign DNA to vector DNA.