The Macroeconomic Theory Stating That Because Workers and Firms Take

question 15

Multiple Choice

The macroeconomic theory stating that because workers and firms take all information into account, only unexpected changes in the money supply affect aggregate output is called _____ theory.

• A) real business cycle
• B) rational expectations
• C) new classical
• D) supply-side

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Definitions:

Homophily

The tendency of individuals to associate and bond with similar others, often leading to social and economic networks characterized by high degrees of similarity in beliefs, values, and social status.

Multiracial

Describing individuals or groups composed of or identifying with more than one racial background.

Lutheran Church

A major branch of Protestant Christianity, which identifies with the theology of Martin Luther, a 16th-century German reformer, known for its emphasis on justification by faith alone.

Digital Divide

The disparity between people who can use contemporary information and communication technology and those who lack this access.