Which of the following statements is (are) correct? Critics of the real business cycle model
a. question whether technology has ever been the cause of a recession.
b. do not deny that some technology shocks affect many industries. However, they do not believe that there are enough of these shocks to explain recessions where output falls too as much as 10 percent below potential output.
c. argue that aggregate supply changes drive most business cycles.
d. All of the above
e. None of the above
Question 2
In the simple Keynesian model, government spending
a. have a smaller multiplier than tax changes.
b. can have a larger or smaller multiplier depending upon monetary policy
c. have the same multiplier as changes in taxes.
d. have a greater multiplier than tax changes.
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