In the Stylized DSGE Model, the Motivation for a Rise

question 62

Multiple Choice

In the stylized DSGE model, the motivation for a rise in government expenditure ________ today is ________.

• A) reducing consumption; permanent income hypothesis
• B) raising wages; a rise in TFP
• C) increasing labor demand; the Solow growth model
• D) forcing workers to work; capacity utilization
• E) increasing leisure; diminishing returns to consumption

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Definitions:

Spontaneous Recovery

In psychology, the reappearance of a conditioned response after a delay or period of extinction.

Consistent

Showing steady conformity to character, profession, belief, or custom.

Experiments

Research methods employed to explore, verify a hypothesis, or prove an established truth.

Model

A representation, either physical, mathematical, or conceptual, used to describe, explain, or predict phenomena in the real world.