According to the Real Business Cycle Theory, During a Recession

question 59

Multiple Choice

According to the real business cycle theory, during a recession the demand for labour _______ and the supply of labour _______.

• A)decreases; increases
• B)decreases; does not change
• C)does not change; decreases
• D)increases; decreases
• E)decreases; decreases

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Definitions:

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.

Plastic Bins

Containers made of plastic material used for storing or transporting items.

Door Hooks

Hardware items typically mounted on doors or walls for hanging or holding clothes, towels, and other items securely.

Marginal Utility

The added satisfaction or utility that a consumer receives from consuming one additional unit of a good or service.