In real business cycle models,a change in willingness to work ________.
A)is associated with productivity shocks
B)causes a shift of the aggregate demand curve
C)would violate the market-clearing assumption
D)has no effect on potential output

Question

Quizplus · Accepted Answer

In real business cycle models, a change in willingness to work is associated with productivity shocks, as these models emphasize how real (i.e., non-monetary) shocks to productivity can lead to fluctuations in economic output, employment, and other key variables.

In Real Business Cycle Models,a Change in Willingness to Work