The factor leading to business cycles in the real business cycle theory is changes in the growth rate of
A) the quantity of money.
B) the money wage rate.
C) productivity.
D) labor supply.

Question

Quizplus · Accepted Answer

According to the real business cycle theory, business cycles are primarily caused by changes in productivity, such as technological advances or changes in natural resource availability. Changes in the quantity of money, the money wage rate, and labor supply are not seen as the main drivers of business cycles in this theory.

The Factor Leading to Business Cycles in the Real Business