Which of the following pieces of evidence is most consistent with the real business cycle theory?
A. Labor supply decisions do not seem to depend on real interest rates.
B. Real GDP and the quantity of money move closely together.
C. Money wage rates take some time to adjust to price changes.
D. Productivity and GDP move closely together.
Answer:D
Which of the following pieces of evidence is most consistent with the real business cycle theory?
A. Labor supply decisions do not seem to depend on real interest rates. B. Real GDP and the quantity of money move closely together. C. Money wage rates take some time to adjust to price changes. D. Productivity and GDP move closely together.