According to Real Business Cycle Models

question 58

Multiple Choice

According to real business cycle models

• A) total real output does not change in response to changes in aggregate supply and demand; only price levels change.
• B) aggregate supply is horizontal so that fluctuations in real GDP result from changes in aggregate demand.
• C) changes in total real output vary inversely with changes in real GDP.
• D) real output cannot grow faster than the real rate of interest.
• E) real wages tend to fall when real GDP falls and rise when real GDP rises.

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Definitions:

Striate Cortex

Primary visual cortex (V1) in the occipital lobe; shows stripes (striations) on staining.

Melanopsin

A photopigment found in the retina that plays a key role in regulating circadian rhythms and pupillary reflex by responding to blue light.

Photoreceptor

Specialized retinal neuron that transduces light into neural activity.

Circadian Rhythms

Natural, internal processes that regulate the sleep-wake cycle and repeat roughly every 24 hours, influencing physical, mental, and behavioral changes.