Author Question: With which of the following statements would a real business cycle theorist most closely agree? ... (Read 150 times)

savannahhooper · **on:** Jun 29, 2018

With which of the following statements would a real business cycle theorist most closely agree?

A) Expansionary monetary policy allows the central bank to control inflation and unemployment simultaneously.
B) Monetary policies have the greatest impact on real GDP when they are anticipated.
C) Wages adjust rapidly to changes in inflation as long as expectations are formed rationally.
D) Technological shocks to the economy affect only aggregate demand in the short run.

Question 2

How is the market demand for public goods derived?

What will be an ideal response?

laurnthompson · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

To arrive at the market demand for public goods, we add up the amounts that individual households are willing to pay for each potential level of output.