How Do RBC Economists Face the Business Cycle Fact That

question 71

Multiple Choice

How do RBC economists face the business cycle fact that inflation is procyclical?

• A)They argue that even though inflation doesn't fit their theory, everything else does, and inflation is not important.
• B)They note that inflation would not be procyclical if monetary policy were conducted properly.
• C)They argue that inflation is procyclical only because monetary policy shocks are the main cause of business cycles.
• D)They use alternative statistical methods that suggest that inflation is countercyclical.

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Definitions:

Undifferentiated Targeting

A marketing strategy where a company decides to ignore market segment differences and appeals the whole market with one offer or one strategy.

Benefit Segmentation

A marketing approach that entails categorizing a market by the varied benefits consumers desire from the product.

Concentrated Targeting

A marketing strategy where a business focuses its efforts on a narrowly defined market segment or niche, rather than trying to appeal to a broader market.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.