Critics of the Real Business Cycle Theory Claim That

question 172

Multiple Choice

Critics of the real business cycle theory claim that

• A) changes in technology cannot cause economic growth.
• B) the intertemporal substitution effect is too weak to account for changes in labor supply.
• C) both real and nominal variables change during the business cycle.
• D) Both answers B and C are correct.

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Definitions:

Vertebrate Eye

The complex optical organ in vertebrates that enables vision by detecting light and converting it into electro-chemical impulses in neurons.

Layer

A sheet, coat, or level of material, often one of several, that lies over or under another.

Action Potentials

Rapid, temporary changes in the electrical membrane potential that propagate along the membrane of a neuron or muscle cell, facilitating the transmission of signals.

Interpreted

Relating to programming languages, it describes a method where instructions are executed directly rather than being previously compiled into machine-language instructions.