If rapid increases in oil prices caused price levels to increase and real GDP to decrease in the short run, the economy would experience

Comparative advantage is based on

A) comparing physical endowments, such as mineral resources, of two countries. B) differences in opportunity costs between two countries. C) one country being able to outproduce another country in some good. D) comparing the capital accumulation of two countries. E) two countries producing the same good.

According to real business cycle theory

A) monetary policy is driving business cycles. B) Federal Reserve actions need to be watched closely. C) technology shocks have a major role in business cycles. D) cash-in-advance is necessarily to explain business cycles.