Real Business Cycle Theory Is an Attempt to Explain Business

question 131

Multiple Choice

Real business cycle theory is an attempt to explain business cycle fluctuations under the assumptions of

• A) government intervention and trade regulation.
• B) wage and price controls.
• C) closed economies and fiscal spending.
• D) market clearing and rational expectations.

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Definitions:

Replacement Level

The fertility rate at which a population exactly replaces itself from one generation to the next, without migration.

Demographic Transition

A theory describing the transition from high birth and death rates to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Marx

Karl Marx, a 19th-century philosopher and economist known for his theories about capitalism, class struggle, and the development of socialist and communist societies.