To Support the RBC Approach According Which Productivity Shocks Generate

question 12

Multiple Choice

To support the RBC approach according which productivity shocks generate inflation and recession at the same time,the RBC theorists argue that

• A)the conventional approach that inflation is procyclical is consistent with the pre-World War II economy.
• B)the structure of the economy and the types of shocks have changed since the Great Depression.
• C)the oil supply shocks in the 1970s caused the price level to rise while output fell.
• D)all of the above.

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Definitions:

Lorenz Curve

A graphical representation of the distribution of income or wealth within a society, showing the degree of inequality.

Perfect Equality

A theoretical state in which all individuals have the same wealth, income, or resources.

Unequal Income Distribution

The disparity in earnings among different individuals or groups in an economy, often measured by metrics like the Gini coefficient.

Equality Of Income

Describes a situation where income is distributed evenly across all members of a society, minimizing the gap between the highest and lowest earners.