Question 1
According to the real business cycle theory, ________ are responsible for economic growth.
◦ expansionary fiscal and monetary policies
◦ positive shifts in the
AD curve
◦ trade and income policies
◦ positive shifts in the
AS curve
Question 2
According to the real business cycle theory, technological advances
◦ increase the marginal product of labor, which causes real wages and output to decline.
◦ decrease the marginal product of labor, which causes real wages and output to increase.
◦ increase the marginal product of labor, which causes real wages to increase and output to decline.
◦ increase the marginal product of labor, which causes real wages and output to increase.