According to real business cycle theorists,
A) fiscal policy explains most changes in output.
B) price and wage rigidity explain most changes in output.
C) efficiency wage theory explains wage rigidity.
D) changes in output primarily represent changes in the natural level of output.
E) fiscal policy explains most changes in efficiency wage theory.
D
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When the economy is producing the maximum amount that it can, increasing the money supply will cause prices and output to increase
Indicate whether the statement is true or false
If the economy is producing a combination of goods inside its production possibilities frontier, then
a. workers are on vacation b. a significant number of workers have little education c. some resources are being wasted d. technology must improve before output can increase e. the opportunity cost of producing more output is greater than the value of the additional output that could be produced