Because of Intertemporal Substitution,a Real Shock Has More of an Effect

question 52

True/False

Because of intertemporal substitution,a real shock has more of an effect on real GDP growth but less of an effect on inflation.

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Definitions:

Compensating Differentials

Wage differences across jobs that reflect the desirability of the job attributes, compensating workers for non-monetary aspects of different jobs like risk or undesirable hours.

Median Earnings

The middle value of earnings in a group, indicating that half of the group earns more and half earns less than this amount.

Private Businesses

Enterprises owned, operated, and managed by individual entrepreneurs, groups, or families, primarily for profit, without state control.

Working Conditions

The environment, terms, and circumstances under which employees work, including aspects like hours, safety, rights, and wages.