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

Question

Quizplus · Accepted Answer

The real business cycle theory attributes economic fluctuations to random shocks to productivity, such as technological innovations or changes in resource availability. This theory suggests that government intervention in the economy, such as fiscal or monetary policy, may not be effective in stabilizing the business cycle.

The Theory That Regards Random Fluctuations in Productivity as the Main