The utility may be defined as:
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The desire for a commodity
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The usefulness of a commodity
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The necessity of a commodity
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In the real business cycle model, business cycles are
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Efficient and do not represent lost output
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Driven by technology shocks
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Occur when markets clear
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Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion. Then, what is the structural deficit?
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$180 billion
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$120 billion
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$220 billion
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In any efficiency wage model it must be true that
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The marginal benefit of increased efficiency is equal to the marginal cost of higher wages
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Nominal wages are inflexible
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Disequilibrium in the labor market exists
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All of the above
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Real business cycle proponents argue that
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Recessions are caused by movements of output away from the natural rate of output
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Prices and wages are sticky
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Macroeconomics should be based on the same assumptions as microeconomics
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If the quantity of a commodity demanded remains unchanged as its price changes, the coefficient of price elasticity of demand is
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Greater than 1
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Equal to 1
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Less than 1
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The traffic which maximizes a country’s economic welfare is called
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Discriminatory traffic
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Protective traffic
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Optimum traffic
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Factor intensity as it is used in economics, is primarily s:
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Relative concept
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Absolute concept
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Abstract concept
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Which of the following shocks have been emphasized most often with respect to real business cycle story?
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Shocks to technology
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Variations in environmental conditions
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Changes in the real(relative) prices of imported raw materials
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Changes in tax rates
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The real business cycle theory
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Argues for active stabilization policy.
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Argues for interventionist policies in response to recessions
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Is in favor of a constant money growth rate rule for the money stock
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Is an offshoot of Monetarist theory
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