According to Real-Business-Cycle Theory

question 99

Multiple Choice

According to real-business-cycle theory,

• A) monetary factors affecting aggregate demand cause macroeconomic instability.
• B) recessions result from declines in long-run aggregate supply, rather than decreases in aggregate demand.
• C) when real wages fall during recessions, "real" unemployment rates rise.
• D) the net long-run costs of business fluctuations are severe.

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Definitions:

State Unemployment

Government programs funded by payroll taxes on employers, providing financial assistance to workers who have lost their jobs.

FICA Medicare

Part of the U.S. payroll tax, specifically aimed at funding Medicare, a federal health insurance program for people aged 65 and older, and some younger individuals with disabilities.