The Real Business Cycle Theory Argues That

question 76

Multiple Choice

The real business cycle theory argues that

• A)nominal shocks are the main cause of business cycles.
• B)nominal shocks are neutral only in the long run.
• C)real shocks change output in the short run but not in the long run.
• D)real shocks are the main cause of business cycles.

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Definitions:

Biologically Adapted

The process by which organisms or species change over time in response to environmental conditions, through alterations in their genetic composition or physical traits.

Omnivores

Organisms that consume both plant and animal matter for their nutritional needs.

Autotrophs

Organisms that produce their own food from inorganic substances, such as light or chemical energy, including plants and some bacteria.

Solar Energy

Energy from the sun that is converted into thermal or electrical energy.