1. In the RBC (Real Business Cycle) model, if businesses react to a pessimistic outlook and decrease spending, the model predicts a. the aggregate demand curve shift left. b. equilibrium inflation rates fall. c. no change in long run growth rates. d. a&b only e. all of the above 2. In the RBC (Real Business Cycle) model, if you observe unemployment levels rising, what is the likely cause? a. A negative real shock b. A negative aggregate demand shock c. A negative SRAS shock d. A&B only e. None of the above 3. Irrigation technology that changes how farmers utilize rainfall a. will have no effect on economic growth if rain fall levels do not also increase. b. represents a positive aggregate demand (AD) shock. c. may lead to higher levels of productivity growth and lower levels of unemployment. d. represents a negative real shock and will increase unemployment. e. None of the above.
1. In the RBC (Real Business Cycle) model, if businesses react to a pessimistic outlook and decrease spending, the model predicts
a. the aggregate demand curve shift left.
b. equilibrium inflation rates fall.
c. no change in long run growth rates.
d. a&b only
e. all of the above
2. In the RBC (Real Business Cycle) model, if you observe
a. A negative real shock
b. A negative aggregate demand shock
c. A negative SRAS shock
d. A&B only
e. None of the above
3. Irrigation technology that changes how farmers utilize rainfall
a. will have no effect on
b. represents a positive aggregate demand (AD) shock.
c. may lead to higher levels of productivity growth and lower levels of unemployment.
d. represents a negative real shock and will increase unemployment.
e. None of the above.
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