Historical evidence suggests that the predictions of the real business cycle view are
A)accurate in the short run.
B)inaccurate in the short run.
C)inaccurate in the long run.
D)inaccurate in both the short and long run.

Question

Quizplus · Accepted Answer

Historical evidence suggests that the real business cycle view is inaccurate in the short run. This view assumes that economic fluctuations are purely due to productivity shocks and technological changes, but this theory fails to explain the magnitude and persistence of business cycles.

Historical Evidence Suggests That the Predictions of the Real Business