Which of the following statements is (are) correct? Critics of the real business cycle model
a. question whether technology has ever been the cause of a recession.
b. do not deny that some technology shocks affect many industries. However, they do not believe that there are enough of these shocks to explain recessions where output falls too as much as 10 percent below potential output.
c. argue that aggregate supply changes drive most business cycles.
d. All of the above
e. None of the above
B
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Which of the following causes an increase in demand for a normal good?
A) increase in the price of a substitute B) increase in the price of a complement C) decrease in price D) decrease in income
Workers in industrial countries earn much higher wages than workers in developing countries because:
a. the industrial countries are labor rich and capital poor economies. b. the industrial countries lack a steady supply of unskilled laborers. c. the industrial countries produce labor intensive goods. d. the marginal productivity of labor is low in the industrial economies. e. the marginal productivity of labor is high in the industrial economies.