Multiple Choice
According to real business cycle theory:
A) a short-term trade-off exists between unemployment and inflation but not a permanent trade-off.
B) economic fluctuations are the result of external negative and positive productivity shocks to the economy.
C) workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices.
D) the economy will self-correct to the natural rate of unemployment.
Correct Answer:
Verified
Correct Answer:
Verified
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