What do RBC economists mean by the term calibration?
A) Modifying the structure of an economic theory to strengthen its logic
B) Changing a theory as the economy changes
C) Working out a detailed numerical example of a more general theory
D) Writing out the implications of a theory for all the main economic variables
C
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What is the relationship between the MRP and MPP of labor?
a. MRP is MPP multiplied by the price of the good. b. MPP is MRP multiplied by the price of the good. c. MRP is MPP divided by the price of the good. d. MPP is MRP divided by the price of the good. e. MPP is the wage rate that in equilibrium equals MRP.
If the spending multiplier is 1.2, then a $100 billion increase in government spending will increase private sector spending by
A. $100 billion. B. $20 billion. C. $120 billion. D. $83.3 billion.