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Using the Real Business Cycle Theory, Explain How a Significant

question 125

Essay

Using the real business cycle theory, explain how a significant technological improvement can alter the equilibrium employment level and the output level.


Definitions:

Perfect Competitor

A theoretical market structure where numerous small firms sell identical products, and no single seller can influence the market price.

Monopolist

A monopolist is a sole provider of a good or service in a market, having the power to influence the price and quantity of the product.

Output Price

The price at which a product or service is sold in the market.

Monopolist

A single seller in a market with no close substitutes for the product, giving the seller market power.

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