The Model That Focuses on How Productivity Shocks Explain Fluctuations

question 138

Multiple Choice

The model that focuses on how productivity shocks explain fluctuations in real GDP is the

• A) monetarist model.
• B) real business cycle model.
• C) new classical model.
• D) new Keynesian model.

---

Definitions:

Market

A setting where buyers and sellers come together to exchange goods, services, or information.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, reflecting gains above production costs.

Sellers' Costs

The expenses incurred by sellers in producing or procuring goods for sale, including materials, labor, and overhead costs.