If the Real Business Cycle Theory Were Correct, Then the Recession

question 115

Multiple Choice

If the real business cycle theory were correct, then the recession that the U.S. experienced in 2008 was caused by:

• A) a war in the Middle East.
• B) a sharp increase in the price of oil.
• C) a negative shock in technology.
• D) a positive shock in technology.

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Definitions:

Internal Validity

pertains to the extent to which a study or experiment accurately establishes a causal relationship between variables, minimizing the influence of external factors.

Systematic Changes

Alterations that follow a consistent, predictable pattern and are often due to specific causes or interventions.

Time

The indefinite continued progress of existence and events in the past, present, and future regarded as a whole.

History Effects

Events that occur outside the experiment which may affect participants' responses within the experiment.