An important critique of real business cycle theory is that during a recession,
A) there is overutilization of labour and overutilization of the aggregate capital stock.
B) there is underutilization of labour and underutilization of the aggregate capital stock.
C) there is overutilization of labour and the wage rate is constant.
D) there is underutilization of labour and the real wage decreases.
E) there is underutilization of labour and total factor productivity increases.
Correct Answer:
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Q2: An important critique of real business cycle
Q3: Procyclical total factor productivity (TFP)could be caused
Q4: Comovement between nominal and real variables
A) was
Q5: Endogenous money is where the money supply
Q6: According to real business cycle theorists, the
Q8: The Keynesian view implies that there is
Q9: Real business cycle theory was introduced by
A)
Q10: The observed correlation between the price level
Q11: The behaviour of the Solow residual suggests
Q12: In the real business model, a persistent
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