Proponents of the ________ model argue that the short-run supply curve is vertical.
A)the monetarist model
B)the new classical model
C)the real business cycle model
D)the new Keynesian model

Question

Quizplus · Accepted Answer

The real business cycle model posits that fluctuations in the economy are primarily the result of real (in contrast to nominal) shocks, such as changes in technology or resource availability. Proponents of this model argue that because these real factors affect the productive capacity of the economy, the short-run supply curve is vertical, indicating that output is not influenced by changes in the price level in the short run.

Proponents of the ________ Model Argue That the Short-Run Supply