The Model That Focuses on How Productivity Shocks Explain Fluctuations
The model that focuses on how productivity shocks explain fluctuations in real GDP is the
A) monetarist model.
B) real business cycle model.
C) new classical model.
D) new Keynesian model.
What do proponents of the real business cycle model argue about the short-run aggregate supply curve?
A) That it is vertical
B) That it is positively sloped
C) That it is flat
D) That it is negatively sloped
According to the real business cycle model,increases in aggregate demand
A) raise GDP.
B) lower GDP.
C) do not affect GDP.
D) lower the price level.
Rational expectations means that workers and firms form their expectations using
A) all the information available to them.
B) only information from the past.
C) only information provided to them by the government.
D) only information gathered from random sources.