Critics of the Real Business Cycle Theory Claim That

question 101

Multiple Choice

Critics of the real business cycle theory claim that

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

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Definitions:

Barry Goldwater

A U.S. Senator from Arizona and the 1964 Republican nominee for President, known for his conservative positions and as a catalyst for the resurgence of American conservatism.

Welfare State

A social system in which the government takes responsibility for the welfare of its citizens, providing services such as healthcare, education, and financial support.

Robert Mcnamara

A prominent figure in U.S. history who served as the Secretary of Defense during the Vietnam War and later as the President of the World Bank.

Vietnam War

A prolonged conflict from 1955 to 1975 between communist forces in North Vietnam, backed by its communist allies, and the government of South Vietnam, supported by the United States and other anti-communist nations.