According to the Real Business Cycle Theory, Which of the Following

question 133

Multiple Choice

According to the real business cycle theory, which of the following is a true statement about the effects of an oil shock in the 1970s?

• A) The shock affected real variables only and did not affect nominal variables.
• B) The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve.
• C) The natural rate of unemployment remained unchanged, but employment levels did decline.
• D) Relative prices changed but there was no impact on the price level in general.

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Definitions:

Sustainability

The practice of meeting the needs of the present without compromising the ability of future generations to meet theirs, encompassing environmental, social, and economic dimensions.

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Strategies or actions taken to reduce, reuse, and recycle waste, aiming to minimize environmental impact.

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The demographic cohort following the Silent Generation, generally defined as people born from the mid-1940s to the mid-1960s.