Which of the Following Observed Procyclical Behaviour of Variables Can

question 56

Multiple Choice

Which of the following observed procyclical behaviour of variables can be accounted for by the real business cycles theory?

• A)real wages
• B)employment
• C)productivity
• D)all of the above

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Definitions:

Usury Law

Laws that establish a cap on the interest rates that can be applied to loans, aimed at safeguarding individuals from exceedingly high charges.

Loanable Funds

Money available for borrowing. The market for loanable funds is where borrowers and lenders come together, influencing interest rates.

David Ricardo

A British political economist known for his theory on comparative advantage, implying that countries should specialize in and trade goods in which they have a relative efficiency.

Theory Of Rent

A principle explaining how the price and allocation of land and its resources are determined based on their use, productivity, and locational advantages.