The Primary Source of Shocks to Potential Output and Long-Run

question 7

Multiple Choice

The primary source of shocks to potential output and long-run supply for real business cycle theorists is ________.

• A)changes in the money supply
• B)a change in the price of complements
• C)a change in any of the components of aggregate demand
• D)shocks to productivity

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Definitions:

Poisson Distribution

A distribution for predicting the probability of a given number of events occurring over a fixed interval of time or space.

Normal Distribution

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Binomial Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent values under a given set of parameters or assumptions.

Random Variable

A factor that acquires numerical values due to chance occurrences.