Author Question: A usual assumption in real business cycle models is that the economy is populated by a group of ... (Read 49 times)

TVarnum · **on:** Jun 30, 2018

A usual assumption in real business cycle models is that the economy is populated by a group of identical individuals and the behavior of the group can then be explained in terms of the behavior of one individual, called a(n)

a. maximizing agent.
b. representative agent.
c. republican agent.
d. informative agent.
e. democratic agent

Question 2

Within the IS-LM curve model, if the government cut taxes at the same time that there was an autonomous increase in investment demand, then

a. income would rise and the interest rate would fall.
b. income and the interest rate would rise.
c. income would rise but the effect on the interest rate is uncertain.
d. the interest rate would rise but the effect on income is uncertain.
e. the effects on both income and the interest rate are uncertain.