Suppose That the Business Cycle in Canada Is Best Described

question 63

Multiple Choice

Suppose that the business cycle in Canada is best described by RBC theory.An advance in technology increases productivity.The when- to- work decision depends on the real interest rate.The _______ the real interest rate, other things remaining the same, the _______ is the supply of labour today.RBC theorists believe the when- to- work effect is _______.

• A)higher; smaller; small
• B)lower; smaller; small
• C)higher; larger; small
• D)higher; larger; large
• E)lower; larger; large

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Definitions:

Channel Richness

Indicates the capacity of a channel to convey information.

Sense Of Security

A feeling of safety and stability that comes from believing that one is protected from harm and risk.

Grapevine

Transfers information through networks of friendships and acquaintances.

Ethnocentrism

The tendency to believe one’s culture and its values are superior to those of others.