Real Business Cycle Theory Is Unable to Predict That

question 25

Multiple Choice

Real business cycle theory is unable to predict that

• A)employment is procyclical.
• B)the price level is procyclical.
• C)the real wage is mildly procyclical.
• D)investment is more volatile than consumption.

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Definitions:

Blocking

A design technique in experiments that groups units with similar characteristics together to isolate the variable of interest and reduce variation.

Side-effects

Secondary, often undesirable effects of a drug or medical treatment beyond the intended therapeutic effects.

Double Blind

An experimental design in which neither the participants nor the researchers conducting the test are aware of who is receiving a particular treatment, to prevent bias.

Random Assignment

A process used in experiments to assign participants to different groups using a random mechanism, ensuring each participant has an equal chance of being placed in any group.