Real business cycle theorists
a. accept the notion that the economy's movement through time is basically unstable and cyclical
b. believe that the economy is influenced by real events, such as wars and population growth and not by psychological events, such as changes in consumer confidenceand that these real events trigger cycles
c. argue that the economy, except for brief periods of instability, is highly static and this is because markets are noncompetitive
d. argue that the economy cannot achieve full employment, even in the short run
e. believe that the economy is dynamic and competitive and not subject to cycles
E
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Which of the following is an equilibrium condition for the goods market?
A) M = kPQ B) Desired saving and desired investment C) Money demand = money supply D) IS = LM
Which of the following is a name for when a bank promises to lend funds to a borrower to pay off its commercial paper?
A) loan commitment B) standby letter of credit C) securitization D) loan sale
What is a benefit of giving the government freedom to spend more than they receive in taxes and run a deficit?
A. It allows the government to be flexible if something unexpected happens. B. It can make it more difficult for businesses and consumers to borrow. C. There is never a good enough reason to allow public debt. D. The federal government cannot run a deficit.
If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is
A) a downward-sloping straight line. B) circular. C) an upward-sloping curve. D) a downward-sloping curve that is bowed outward. E) a downward-sloping curve that is bowed inward.