The real business cycle theory
A. is an extension of the adaptive expectations theory of business cycles.
B. suggests that instability is caused by shifts in the aggregate demand curve caused by changing consumer confidence in the economy.
C. suggests that instability is caused by shifts in the long-run aggregate supply curve.
D. is an extension of the Keynesian view of business cycles.
Answer: C
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When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the two inflation rates
A) move in opposite directions. B) remained constant over the forty year period after 1979. C) steadily increased over the forty year period after 1979. D) move up and down in similar but not identical ways. E) both fluctuate, but the fluctuations have little relationship to each other.
The Community Charge was a poll tax to fund local government in the United Kingdom, instituted in 1989 by the government of Margaret Thatcher. It replaced the rates that were based on the national rental value of a house
It was a fixed tax per adult resident. Is this tax a proportional, progressive or regressive tax? Explain your answer.
The farm problem in the United States can be summed up as
a. low productivity, high prices, and an income-elastic demand for food b. high productivity, high prices, and an income-elastic demand for food c. low productivity, high prices, and an income-inelastic demand for food d. high productivity, low prices, and an income-inelastic demand for food e. high productivity, low prices, and an income-elastic demand for food
What is the exact real interest rate, when the nominal interest rate is 30% and expected inflation 26%?
a. 3.0% b. 3.2% c. 3.7% d. 4.0% e. 4.2%