The factor leading to business cycles according to the real business cycle theory is changes in
A) productivity caused by changes in technology.
B) the growth rate of the quantity of money.
C) investment caused by changes in business confidence.
D) technological change caused by changes in productivity.

Question

Quizplus · Accepted Answer

According to the real business cycle theory, changes in productivity caused by changes in technology are the main factor leading to business cycles. This theory suggests that fluctuations in economic activity are primarily driven by changes in the technology that affects production, rather than changes in monetary policy or other external factors.

The Factor Leading to Business Cycles According to the Real