Real Business Cycle models, or RBCs, assume there is one perfectly rational household that represents all households, and one firm that represents all firms. Thus, these models are also referred to as representative agent models. a. True b. False

Real Business Cycle models, or RBCs, assume there is one perfectly rational household that represents all households, and one firm that represents all firms. Thus, these models are also referred to as representative agent models. a. True b. False

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter5: An Introduction To Macroeconomics

Section: Chapter Questions

Problem 1TY

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Concept explainers

Demand and Supply

The concept of demand and supply is important for various factors. One of them is studying and evaluating the condition of an economy within a certain period. The analysis or evaluation of the demand-side factors is important for the suppliers to understand the consumer or individual behaviour. The evaluation of supply-side factors is important for the consumer or individuals to understand that what kind of combination of an economic good or what kind of economic good and services he or she should consume to maximise his utility and minimise the cost. Therefore, in microeconomics, both of these concepts are extremely important to have an idea that what exactly is going on in the economy.

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a. True
b. False

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