Critics of the RBC approach argue that it's hard to find productivity shocks large enough to cause business cycles. What is the RBC counterargument to this criticism?
A) Business cycles are always and everywhere a monetary phenomenon.
B) Wars and military buildups could be considered productivity shocks.
C) Business cycles could be caused by the accumulation of small productivity shocks.
D) Business cycles are often caused by unobservable productivity shocks, which aren't apparent at the time they occur.
C
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The difference between the total willingness to pay for a good and the amount actually spent measures:
A) the total benefits from consuming the good. B) the net gain from the production and consumption of the good. C) the amount by which producers are better off, i.e., producers' surplus. D) the amount by which consumers are better off, i.e., consumers' surplus.
The expression "increase in quantity supplied" is illustrated graphically as a
A) leftward shift in the supply curve. B) rightward shift in the supply curve. C) movement up along the supply curve. D) movement down along the supply curve.