Which of the following is not a primary cause of business cycle fluctuations, according to real business cycle theory?
A. A change in the money supply
B. A change in the size of the labor force
C. A change in the real quantity of government purchases
D. A change in the production function
Answer: A
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An individual has 8 hours to spare. He has to divide his time between two activities: reading and writing. Which of the following allocations will exactly satisfy the individual's budget constraint?
A) 3 hours of reading and 4 hours of writing B) 4 hours of reading and 6 hours of writing C) 2 hours of reading and 2 hours of writing D) 5 hours of reading and 3 hours of writing
Credit cards are not a form of money because
A) money needs to be tangible (not virtual). B) credit cards just extend a loan. C) credit cards just relate to an account. D) credit card balances are in fact counted as money.
Other things equal, the supply of labor will be lower to a job that
a. offers more prestige b. offers valuable on-the-job training c. requires advanced skills or education d. provides a climate-controlled work environment e. allows for flexible work schedules
The distinction between efficiency and equality can be described as follows:
a. Efficiency refers to maximizing the number of trades among buyers and sellers; equality refers to maximizing the gains from trade among buyers and sellers. b. Efficiency refers to minimizing the price paid by buyers; equality refers to maximizing the gains from trade among buyers and sellers. c. Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost. d. Efficiency refers to maximizing the size of the pie; equality refers to distributing the pie fairly among members of society.