According to the Real Business Cycle Theory, Which of the Following

question 316

Multiple Choice

According to the real business cycle theory, which of the following is a TRUE statement about the effects of an oil shock in the 1970s?

• A) The shock affected real variables only and did not affect nominal variables.
• B) The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve.
• C) The natural rate of unemployment remained unchanged, but employment levels did decline.
• D) Relative prices changed but there was no impact on the price level in general.

---

Definitions:

Entrepreneurs

Individuals who initiate, manage, and assume the risks of a startup or new business venture to exploit market opportunities.

Raw Energy

A term often used to describe a powerful, innate, and untamed force or dynamism within individuals or teams.

Intelligence

refers to the ability to learn, understand, and apply knowledge, solve problems, and adapt to new situations.

Entrepreneurial Process

A series of steps taken by entrepreneurs to conceptualize, launch, and manage a new business venture.