According to the Real Business Cycle Theory,an Increase in an Input

question 26

Multiple Choice

According to the real business cycle theory,an increase in an input price,such as oil,will

• A)increase both real income and the price level.
• B)increase real income but not change the price level.
• C)decrease real income but increase the price level.
• D)decrease both real income and the price level.

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Definitions:

General Agreement on Tariffs and Trade

An international trade treaty aimed at reducing customs tariffs and other trade barriers to foster global economic trade.

GATT

GATT, or the General Agreement on Tariffs and Trade, was a legal agreement created in 1947 to minimize barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies while preserving significant regulations.

International Migration

The movement of individuals across national borders for the purpose of settling in a new country, either temporarily or permanently.

World Output

The total value of all goods and services produced across the globe.