This theory views shocks to tastes (workers' willingness to work, for example) and technology (productivity) as the major driving forces behind short-run fluctuations in the business cycle because these shocks lead to substantial short-run
fluctuations in the natural rate of output. A) the natural rate hypothesis
B) hysteresis
C) real business cycle theory
D) the Phillips curve model
C
You might also like to view...
The Other America, which challenged the notion that we had conquered poverty, was written by ___________.
Fill in the blank(s) with the appropriate word(s).
One of the risks of maturity transformation is that:
A) it can increase the rate of inflation. B) it reduces the profitability of banks. C) it can lead to bank runs. D) it discourages savings.
According to the life-cycle hypothesis, as people grow older ________
A) their wealth grows before and after retirement B) their wealth declines before and after retirement C) their wealth grows before retirement, then declines after retirement D) their wealth falls before retirement, then rises after retirement
Dr. Rand earns $420,000 per year. He is charged a 20% tax on the first $100,000 he earns. He is charged a 30% tax for any income he earns between $100,000 and $250,000, and he is charged a 38% tax on anything he earns over $250,000. How do we find his average tax rate?
a. Add 20% of $100,000, 30% of $150,000, and 38% of $170,000, and then divide the total by $420,000. b. Subtract 20% from 38%, divide the amount by $420,000, and then add 30% of $250,000. c. Multiply $420,000 times 20%, 30%, and 38%, add them up and divide the total by three. d. Add 20%, 30%, and 38%, divide by three, and multiply that amount times $420,000.