A key element of real business cycle theory is that
a. labor supply is not responsive to changes in real wages.
b. labor supply is highly elastic.
c. as the wage increases, workers are richer and work less.
d. none of the above.
B
You might also like to view...
An export subsidy will cause the terms of trade of the ________ country to ________ and will ________ the country
A) exporting; suffer; harm B) exporting; improve; benefit C) importing; suffer; harm D) importing; suffer; benefit E) importing; improve; harm
Government-imposed quantity restrictions
A) generate a higher price for the good than would prevail under freely competitive markets. B) generate a lower price for the good than would prevail under freely competitive markets. C) does not affect the price of the good because quantity restrictions always ban sale of the good completely. D) can cause prices to either be higher or lower, but always cause excess quantities supplied to develop.