The __________cycle theory states that only unexpected fluctuations in aggregate demand are the main source of business cycles.
A) new Keynesian
B) Keynesian
C) monetarist
D) new classical

Question

Quizplus · Accepted Answer

The new classical cycle theory, also known as the Real Business Cycle (RBC) theory, argues that business cycles are primarily the result of real shocks, such as technological changes or changes in the availability of resources, rather than changes in aggregate demand. The theory maintains that individuals and firms respond efficiently and rationally to changes in economic conditions, leading to fluctuations in supply and demand, output, and prices.

The __________Cycle Theory States That Only Unexpected Fluctuations in Aggregate