The most common measure of productivity shocks used by real business cycle theorists is
A. average labor productivity.
B. the change in the capital stock.
C. the Solow residual.
D. unit labor costs.
Answer: C
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In the Classical model, high unemployment ________.
A. occurred when the equilibrium GDP was too low B. could last for a long period of time C. would cause wages to fall D. required government intervention to reduce it
If the Fed increases the real interest rate as a response to a decrease in the inflation rate, the ________, which results in a ________
A) MP curve shifts up; movement down the AD curve B) MP curve shifts up; movement up the AD curve C) IS curve shifts up; movement down the AD curve D) IS curve shifts up; movement up the AD curve
19th-century cost-saving innovations in steamboat transportation included all of the following except
a. the replacement of steam-powered boilers by coal-burning engines. b. the adoption of lighter-weight boats. c. increases in the amount of cargo carried per vessel. d. learning to operate the boats at night.
Normally, to the extent that a governmental control mechanism succeeds in affecting price, it can be expected to lead to a corresponding
a. reduction in the volume of sales only if the price is forced down. b. reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up. c. decrease in the volume of sales whether the price is forced up or down. d. increase in the volume of sales whether the price is forced up or down.