The theory that regards random fluctuations in productivity as the main source of economic fluctuations is the _ of the business cycle.
A) real business cycle theory
B) dynamic general equilibrium theory
C) productivity theory
D) Keynesian cycle theory

Question

Quizplus · Accepted Answer

Real business cycle theory states that fluctuations in productivity are the primary source of economic cycles. This theory emphasizes the importance of technology shocks, natural disasters, and other factors that affect the economy's productive capacity. It suggests that economic fluctuations are efficient market responses to changes in technology, labor supply, and other real economic variables.

The Theory That Regards Random Fluctuations in Productivity as the Main