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:

Variable Costs

Costs that vary directly with the level of production or service activity.

Exiting

The process of leaving or withdrawing from a situation, market, or competition, often used in the context of firms leaving an industry.

Break Even

Break even is a point at which total costs and total revenues are exactly equal, meaning there is no net loss or gain, and the business or project is just covering its expenses.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs.