Long-Run Aggregate Supply Shocks Are Not a Source of Business

question 46

Multiple Choice

Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________,because ________.

• A)traditional Keynesian model;long-run supply shocks are incompatible with adaptive expectations
• B)traditional Keynesian model;demand fluctuations are considered of dominant importance
• C)real business cycle model;shocks cannot persist in the long run,when prices and wages are flexible
• D)new Keynesian model;such shocks are anticipated by forward-looking consumers and firms

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Definitions:

Normal Time

The average time that a worker takes to complete a specific task under normal working conditions, considering both productive and unproductive time.

Standard Time

indicates the amount of time that should be taken to complete a particular job or task, typically determined through time studies and used for planning and benchmarking.

Variable Allowance

An additional time or financial buffer incorporated into estimates or plans to accommodate uncertainty or variations from the norm.

Standard Deviation

A measure indicating the amount of variability or dispersion in a set of related values.