Models That Focus on Factors Such as Technology Shocks Rather

question 19

Multiple Choice

Models that focus on factors such as technology shocks rather than "monetary" explanations of fluctuations in real GDP are called

• A)nonmonetary business cycle models.
• B)real business cycle models.
• C)rational expectations models.
• D)short-run macroeconomic models.

---

Definitions:

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, imposing a heavier burden on lower-income individuals.

Proportional Tax

A tax system where the tax rate is fixed and applied uniformly to all taxpayers, regardless of income level.

Marginal Tax Rate

The tax rate applied to the next dollar of taxable income, indicating how much tax will be paid on an additional dollar earned.

Average Tax Rate

The fraction of total income that is paid as taxes, calculated by dividing the total amount of tax paid by the total income.