Real business cycle (RBC) theory predicts that the main source of economic fluctuations is
A) sticky money wage rates.
B) changes in the growth rate of productivity.
C) rational expectations based on complete information.
D) all of the above

Question

Quizplus · Accepted Answer

RBC theory predicts that economic fluctuations are the result of changes in the growth rate of productivity, such as technological progress or changes in natural resource availability. The theory does not emphasize sticky money wage rates or rational expectations as the main source of economic fluctuations. Therefore, option B is the best choice.

Real Business Cycle (RBC) Theory Predicts That the Main Source