According to Real Business Cycle Theory, an Increase in Productivity

question 14

Multiple Choice

According to real business cycle theory, an increase in productivity ________ the demand for loanable funds, ________ the demand for labour, and ________ the supply of labour. The real interest rate will ________.

• A)increases; increases; does not change; fall
• B)increases; increases; does not change; rise
• C)decreases; decreases; decreases; fall
• D)increases; increases; increases; rise
• E)increases; increases; increases; fall

Acknowledge the role of information and perspectives in effective decision-making during crises.

Identify the characteristics of and approaches to programmed and nonprogrammed decisions.

Understand the role and limitations of economic models in explaining real-world phenomena.

Comprehend that economists use assumptions to simplify the complex world and facilitate understanding.

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Definitions:

Malthus's Theory

A theory proposed by Thomas Malthus suggesting that population growth is potentially exponential while the growth of the food supply or other resources is linear, leading to overpopulation and societal strain.

Eat

The act of consuming food for nutritional sustenance.

Social Determinants

Factors in society such as economic status, education, and environment that influence individual and group health.

Industrialization

The process of transforming economies from based on agriculture to one based on the manufacturing of goods, characterized by technological innovation and urbanization.