Real Business Cycle Theory Explains the Business Cycle as the Result

question 190

Multiple Choice

Real business cycle theory explains the business cycle as the result of

• A) excess growth of the quantity of money.
• B) unstable investment demand.
• C) shocks to consumer spending habits.
• D) fluctuations in productivity.

---

Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option available during a decision-making process.

Controllable Cost

Expenses that can be directly managed or influenced by a decision-maker within a specific time frame.

Line Authority

The power given to managers to make decisions and issue commands within their scope of responsibility, and to expect those commands to be followed by subordinate employees.

Financial Controller

A senior executive responsible for overseeing an organization's day-to-day financial operations, reporting, and compliance.