According to the Real Business Cycle Theory, Technological Change

question 45

Multiple Choice

According to the real business cycle theory, technological change

• A) is caused by changes in productivity.
• B) never increases productivity.
• C) can initially decrease productivity.
• D) always increases productivity.

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Definitions:

Redistributing Income

The process by which government policies or mechanisms transfer income from certain groups of individuals to others to promote economic equality.

Equality

The state of being equal, especially in status, rights, and opportunities.

Incentives

Motivations or rewards designed to engender specific behaviors or actions in economic agents.

Samaritan's Dilemma

The Samaritan's Dilemma describes a situation where the act of helping others discourages them from helping themselves, potentially leading to dependency or reduced effort.