The most controversial element of the Frisch-Slutsky paradigm concerns
A) the direction in which employment moves during business cycles
B) the duration of business cycles
C) which types of events can cause business cycles
D) the manner in which exogenous shocks are translated into business cycles
E) whether the business cycle creates impulses or propagation mechanisms

Question

Quizplus · Accepted Answer

The Frisch-Slutsky paradigm is controversial in the manner in which it explains how exogenous shocks are translated into business cycles. Some economists argue that the paradigm fails to explain the complexity of the propagation mechanisms involved in business cycles.

The Most Controversial Element of the Frisch-Slutsky Paradigm Concerns