With Which of the Following Statements Would a "Real Business

question 219

Multiple Choice

With which of the following statements would a "real business cycle" theorist most closely agree?

• A)"Monetary policies have the greatest impact on real GDP when they are anticipated."
• B)"Expansionary monetary policy allows the central bank to control inflation and unemployment simultaneously."
• C)"Wages adjust rapidly to changes in inflation as long as expectations are formed rationally."
• D)"Technological shocks to the economy affect only aggregate demand in the short run."

---

Definitions:

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected outcome.

Debts

Money owed by one party to another, which is to be repaid according to terms agreed upon by both parties.

Revenue Account

An account that records the income generated from the sale of goods and services.

Debit Balance

An account balance where total debits exceed total credits.