Critics of the Real Business Cycle Model Argue That

question 101

Multiple Choice

Critics of the real business cycle model argue that

• A) investment spending is strongly related to the real interest rate.
• B) investment spending is only weakly related to the real interest rate.
• C) labor supply is only weakly related to the real interest rate.
• D) labor supply is very strongly related to the real interest rate.

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Definitions:

Dependent Variables

Variables in an experiment that are expected to change as a result of manipulations in the independent variables.

Confounding Variables

Factors other than the independent variable that may cause a change in the dependent variable, potentially skewing results in an experiment.

Control Groups

In experiments, the groups that do not receive the experimental treatment and are used as a baseline to compare the effects of the treatment.

Treatment Groups

In experimental research, groups of participants receiving the intervention or treatment being tested, as opposed to control groups which receive no treatment or a placebo.