Author Question: The major criticism of real business cycle models is A) positive technology shocks actually push ... (Read 86 times)

skymedlock · **on:** Jun 29, 2018

The major criticism of real business cycle models is

A) positive technology shocks actually push real GDP above the economy's potential GDP.
B) this model relies too heavily on monetary explanations for fluctuations in real GDP.
C) negative technology shocks actually push real GDP below the economy's potential GDP
D) negative technology shocks are uncommon and can't explain all business cycle fluctuations.

Question 2

To combat a recession with discretionary fiscal policy, Congress and the president should

A) decrease taxes to increase consumer disposable income.
B) decrease government spending to balance the budget.
C) lower interest rates and increase investment by increasing the money supply.
D) raise taxes on interest and dividends, but not on personal income.