According to Real Business Cycle Models

question 26

Multiple Choice

According to real business cycle models

• A)the long-run Phillips curve is negatively sloped.
• B)the economy is normally operating below the natural rate of unemployment.
• C)unexpected changes in monetary policy are the major source of fluctuations in real GDP.
• D)the economy is normally at potential GDP.

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, representing the profit producers make.

Tax

A compulsory charge by the government on individuals or entities' income, property, or goods, used to fund public services and government obligations.

Deadweight Loss

Deadweight loss refers to the loss of economic efficiency when the equilibrium outcome is not achievable or is not achieved in the market.

Tax

A compulsory monetary fee or a different kind of charge levied on a taxpayer by a government entity to finance government expenses and various public costs.