Suppose an Economist Finds That Real Interest Rates Are Extremely

question 170

Multiple Choice

Suppose an economist finds that real interest rates are extremely high in most recession, which are the times when employment is low. This finding would pose the biggest problem for the

• A) new classical theory of the business cycle.
• B) real business cycle theory.
• C) new Keynesian theory of the business cycle.
• D) Keynesian theory of the business cycle.

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Definitions:

Neoliberalism

An economic and political ideology advocating for free-market policies, deregulation, a limited state role in the economy, and enhanced individual entrepreneurial freedoms.

Ethical Relativism

The theory that there are no universal moral principles, but rather that morality varies by culture or individual preference.

Human Values

Fundamental beliefs that guide or motivate attitudes and actions, encompassing importance of ethics and character in individuals and society.

Objective Standards

Criteria independent of the parties' personal intentions or beliefs, used to assess behavior or performance.