Real business cycle theory explains variations in prices, employment, and real Gross Domestic Product (GDP) by focusing on
A) changes in real variables such as supply shocks, technological changes, and shifts in the composition of the labor force.
B) anticipated changes in fiscal policy enacted by the government.
C) the effects of the Phillips curve.
D) anticipated monetary policies enacted by the Fed.
Question 2
If knowledge possessed by one party in a financial transaction is not known to the other party, ________ exists.
A) fraud B) asymmetric information
C) disintermediation D) no financial intermediation
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