Real Business Cycle (RBC) Theory Predicts That the Main Source

question 301

Multiple Choice

Real business cycle (RBC) theory predicts that the main source of economic fluctuations is represented by

• A) sticky money wage rates.
• B) rational expectations based on complete information.
• C) changes in the growth rate of productivity.
• D) None of the above answers is correct.

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Definitions:

Hypocrites

Hypocrites are individuals who claim to have moral beliefs, standards, or virtues that their own behavior does not conform to; their actions contradict their stated beliefs or values.

Attitudes

A settled way of thinking or feeling about something, typically reflected in a person's behavior or expressed beliefs.

Effort Justification

The cognitive dissonance reduction mechanism where individuals attribute a higher value to an outcome they had to put effort into achieving, regardless of the actual value.

Cognitive Dissonance Theory

A psychological theory that suggests discomfort arises from holding two conflicting beliefs simultaneously, leading individuals to change their attitudes or beliefs to reduce discomfort.