According to Real Business Cycle Theorists,the Tendency of Money to Lead

question 5

Multiple Choice

According to real business cycle theorists,the tendency of money to lead output may be due to

• A) government spending shocks, which lead to later changes in economic activity, and the tendency for bank loans to expand in advance of real activity that will occur at a later date.
• B) the tendency for bank loans to expand in advance of real activity that will occur at a later date and the Bank of Canada's use of all available information in trying to stabilize the price level.
• C) the Bank of Canada's use of all available information in trying to stabilize the price level and the Bank of Canada's use of all available information in trying to stabilize the level of economic activity.
• D) the Bank of Canada's use of all available information in trying to stabilize the level of economic activity and government spending shocks, which lead to later changes in economic activity.
• E) the Bank of Canada's use of all available information in trying to stabilize business cycle fluctuations and the price level.

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Definitions:

Marketing-Related Product Failure

Occurs when a product does not meet the expected sales or market acceptance due to marketing strategy flaws such as misidentification of target audience or incorrect positioning.

Derived Demand

The demand for a product or service that arises from the demand for another product or service, such as the demand for steel being derived from the demand for automobiles.

Dynamically Continuous Innovations

Innovations that represent a moderate change to an existing product that requires a slight change in consumer behavior.

Discontinuous Innovations

Innovations that create a significant change in consumer behavior or revolutionize the way a market functions, often by introducing a completely new product or service.