Recall the Application which questions whether a standard real business cycle model can be used to explain both the origin and severity of the Great Depression to answer the following question(s).
-According to the real business cycle model, if negative technology shocks were responsible for the origin and severity of the Great Depression, output would be expected to ________ and real income would be expected to ________.

Question

Quizplus · Accepted Answer

According to the real business cycle model, negative technology shocks would cause a decline in output and a decline in real income, which is consistent with the severity of the Great Depression.

Recall the Application Which Questions Whether a Standard Real Business