Which of the Following Is a Criticism of Real Business

question 324

Multiple Choice

Which of the following is a criticism of real business cycle theory?

• A) Real business cycle theory fails to explain the phenomenon of economic growth.
• B) Real business cycle theory assumes that money wage rates are sticky.
• C) Real business cycle theory believes that productivity changes are caused by technology changes when in fact they are caused by changes in aggregate demand.
• D) None of the above are criticisms of real business cycle theory.

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Definitions:

Center

In geometry, the central point of a circle or sphere, equidistant from all points on the perimeter or surface; in other contexts, it refers to a focal point or main area of activity.

Point

A location in space, often defined by its coordinates in a given dimension.

Center

The midpoint of a geometric shape or object, or the average position of all the points in the shape.

Radius

The distance from the center of a circle to any point on its circumference, or from the center of a sphere to any point on its surface.