According to the theory, a decrease in productivity growth will shift the _ and trigger a business cycle.
A) real business cycle model; AD curve rightward
B) real business cycle model; demand for loanable funds curve leftward
C) Keynesian cycle model; SAS curve leftward
D) Keynesian cycle model; SAS curve rightward

Question

Quizplus · Accepted Answer

According to the real business cycle model, a decrease in productivity growth will lead to a decrease in the demand for loanable funds, which will shift the demand for loanable funds curve leftward and trigger a business cycle. Choices A, C, and D are incorrect because they reference the Keynesian cycle model or describe shifts in different curves.

According to the Theory, a Decrease in Productivity Growth Will