Critics of the RBC approach argue that it's hard to find productivity shocks large enough to cause business cycles. What is the RBC counterargument to this criticism?
A. Wars and military buildups could be considered productivity shocks.
B. Business cycles are often caused by unobservable productivity shocks, which aren't apparent at the time they occur.
C. Business cycles are always and everywhere a monetary phenomenon.
D. Business cycles could be caused by the accumulation of small productivity shocks.
Answer: D
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One of the functions of deliberation councils is to
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Scientists are very hesitant to base any knowledge on heuristic models because:
A. it is easy to believe a story and make sense of it within its own frame. B. they contain too many equilibria. C. they do not contain any implications for government policy and influencing choice. D. they only use the deductive approach.