Real business cycle theory emphasizes that shocks to technology can play a big part in causing economic fluctuations
Indicate whether the statement is true or false
TRUE
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Comparative advantage implies choosing the activity that
A) has a high opportunity cost. B) is inside the production possibilities frontier. C) has the lowest opportunity cost. D) does not demand any specialization.
In general we may note that inflation:
A. doesn't necessarily harm purchasing power. B. always decreases purchasing power. C. always increases purchasing power. D. should try to be avoided at all costs.
If the economy is represented in the graph shown and is currently at point E1, what could be said about the state of the economy?
A. There is higher unemployment than the natural rate.
B. There is lower unemployment than the natural rate.
C. The unemployment rate is just about the natural rate.
D. The unemployment rate is zero.
In addition to shifting its demand curve to the right, a firm may engage in advertising in order to
a. make its demand curve more elastic b. increase the elasticity of its supply curve c. discourage competition d. make its demand curve less elastic e. decrease consumer awareness