The real business cycle theory asserts that even slight changes in wages may have a significant impact on output since
A) labor supply is highly sensitive to temporary changes in wage rates
B) even a small wage rate change will induce people to work harder if it is assumed to be permanent
C) wages adjust only slowly, so even a small wage rate change will leave the labor market out of equilibrium for a long time
D) smaller wage rate changes are harder to detect and therefore workers are more likely to make forecasting errors
E) none of the above
Correct Answer:
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Q1: The rational expectations equilibrium approach
A)is supported by
Q2: The rational expectations equilibrium approach
A)attempts to build
Q4: The rational expectations equilibrium approach claims that
Q5: The rational expectations approach
A) insists that all available
Q6: The rational expectations approach assumes that
A)people never
Q7: The rational expectations equilibrium approach emphasizes
A)the microeconomic
Q8: According to the Lucas' rational expectations approach,
A)people
Q9: When individuals form expectations using information efficiently
Q10: According to the rational expectations equilibrium approach
A)announced
Q11: The Lucas rational expectations model and the
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