Real business cycle proponents argue that
a. recessions are caused by movements of output away from the natural rate of output.
b. prices and wages are sticky.
c. macroeconomics should be based on the same assumptions as microeconomics.
d. monetary policy is important in determining recessions.
e. none of the above.
C
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If you have flipped a fair coin and tails has come up 49 times in a row, what are the odds that the next flip will be a tail?
A) 0 B) 1/50 C) 1/25 D) 1/2
A weakness of the market system of resource allocation is that
a. such economies tend to be stagnant b. most participants in such an economy have low standards of living c. there are no limits on an individual's freedom of action d. it does not address the problem of initial inequities in endowments e. its participants are free to act according to their desires