According to Real Business Cycle Theory,supply Shocks Cause

question 37

Multiple Choice

According to real business cycle theory,supply shocks cause

• A) changes in both the volume of transactions and the demand for money.
• B) changes in the price level but no changes in the unemployment rate.
• C) no real changes in the economy, only changes in money, wages, and prices.
• D) a shift in the aggregate demand curve but no change in the price level.
• E) labor surpluses as firms attempt to increase output, holding wages constant.

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Definitions:

Analogy Problem

A type of problem that tests reasoning and understanding through the identification of relationships between pairs of concepts.

Series-Completion

A cognitive task where individuals must identify the missing part in a sequential pattern.

Mental Set

A psychological tendency to approach situations in a certain way based on previous experiences and context, which can sometimes inhibit problem-solving.

Functional Fixedness

A mindset that limits an individual's use of an object to its conventional purpose alone, inhibiting their capacity for innovation and solving challenges.