According to the Real Business Cycle Theory,the Supply Side Shock

question 40

Multiple Choice

According to the real business cycle theory,the supply side shock from dramatic increases in oil prices in the 1970s led to higher unemployment because

• A)when the real wage,W/P,fell,workers chose leisure.
• B)when the real wage,W/P,rose,workers chose leisure.
• C)workers increase Pe.
• D)None of the above.

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Definitions:

Self-fulfilling Prophecy

A belief or expectation that indirectly or directly causes itself to become true, through the behavior it inspires.

Initiating Structure

Leadership behavior that defines and organizes work roles and activities, and sets clear objectives.

Autocratic Leadership

A leadership style where decisions are made unilaterally by the leader without input from group members, emphasizing control and command.

Buffer Criticism

The practice of softening or reducing the impact of critique, often by providing supportive feedback along with it.