According to the real business cycle (RBC) theory, recessions are the result of

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According to the RBC theory, recessions are the result of a fall in growth rate of productivity. This means that the economy experiences a decrease in the efficiency with which it produces goods and services, leading to a decrease in economic activity and output. Other factors such as changes in investment, interest rates, and government policies may also play a role, but the primary cause of recessions in the RBC theory is a drop in productivity growth.

According to the Real Business Cycle (RBC) Theory, Recessions Are