The key idea of the real business theory is that potential output itself will remain stable over time.

Name: The key idea of the real business theory is that potential output itself will remain stable over time.
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Question

Quizplus · Accepted Answer

The key idea of the real business theory is that potential output can change over time due to factors such as technological progress, changes in labor force demographics, and changes in capital stock. Therefore, potential output is not necessarily stable over time according to this theory.

The Key Idea of the Real Business Theory Is That