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In Real-Business-Cycle Theory, Real Output Can Change Without a Change

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In real-business-cycle theory, real output can change without a change in the price level.


Definitions:

Schema Theory

A theory suggesting that all knowledge is organized into units, or schemas, which are networks of connected facts and concepts that help us understand and interpret information.

Attention

The mental process of focusing conscious awareness on a particular aspect of the environment or a specific task.

Expectations

Beliefs about how events, behaviors, and conditions are likely to occur in the future.

ERP Signals

Electroencephalography (EEG) waveforms resulting from brain responses to specific cognitive or sensory events.

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