The Idea That Business Fluctuations Are Primarily Caused by Factors

question 21

Multiple Choice

The idea that business fluctuations are primarily caused by factors affecting aggregate supply rather than aggregate demand is a central tenet of:

• A) Efficiency wage theory
• B) Real-business-cycle theory
• C) Mainstream economics
• D) Monetarism

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Definitions:

Efficiently

Performing or functioning in the best possible manner with the least waste of time and effort, ensuring productivity and effectiveness.

Total Output

The aggregate quantity of goods or services produced by an economy, sector, or firm within a given period.

Specialize

Focus on a specific area of expertise or production to achieve greater efficiency.

Production Possibilities

A curve representing all possible combinations of maximum outputs that could be produced with a fixed amount of resources.