Which of the Following Is a Criticism of the Real

question 366

Multiple Choice

Which of the following is a criticism of the 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:

Actual Value

The real, measured value of an object, property, or financial instrument, as opposed to its estimated or anticipated value.

Variable Allowances

Adjustments in time estimates or costs to accommodate changes in work conditions or processes.

Normal Time

The standard duration that a task or activity is expected to take under normal working conditions.

Actual Average Time

The real measured time taken on average to perform a task or process, used in evaluating and planning efficiencies.