One Problem with Real Business Cycle Theory Is That

question 18

Multiple Choice

One problem with real business cycle theory is that:

• A) it relies almost entirely on Keynes' original ideas, ignoring much of the progress made since then.
• B) it treats government officials as well- meaning public servants, despite much evidence to the contrary.
• C) its models downplay the importance of technological progress in the economy.
• D) it defines "productivity" in a new and not very intuitive way.
• E) it is more successful in explaining expansions than in explaining contractions.

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Definitions:

Conservation Behaviors

Actions and practices undertaken by individuals or groups aimed at protecting the natural environment and conserving resources for future generations.

Environmental Damage

The degradation or harm caused to the natural environment due to human activities, pollution, or natural disasters, impacting ecosystems and biodiversity.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.

Work Performance

The effectiveness and efficiency with which an individual or group accomplishes their assigned tasks and goals.