Real Business Cycle Theory Explains Variations in Prices, Employment, and Real

question 290

Multiple Choice

Real business cycle theory explains variations in prices, employment, and real Gross Domestic Product (GDP) by focusing on

• A) changes in real variables such as supply shocks, technological changes, and shifts in the composition of the labor force.
• B) anticipated monetary policies enacted by the Fed.
• C) the effects of the Phillips curve.
• D) anticipated changes in fiscal policy enacted by the government.

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.