The Real Business Cycle Theory Asserts That Even Slight Changes

question 10

Multiple Choice

The real business cycle theory asserts that even slight changes in wages may have a significant impact on output since

• A)labor supply is highly sensitive to temporary changes in wage rates
• B)even a small wage rate change will induce people to work harder if it is assumed to be permanent
• C)wages adjust only slowly, so even a small wage rate change will leave the labor market out of equilibrium for a long time
• D)smaller wage rate changes are harder to detect and therefore workers are more likely to make forecasting errors
• E)none of the above

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Definitions:

Workforce Forecasting

The practice of predicting the number and types of employees that will be needed by an organization in the future.

Future Requirements

The anticipated needs or conditions that an organization must prepare for to ensure future success and sustainability.

Personnel

Employees or staff members of an organization, often referred to in the context of human resource management.

Supply Forecasting

The process of determining the source or sources of human capital to satisfy the organization's demand.