Real business cycle theory emphasizes that shocks to technology can play a big part in causing economic fluctuations.

Question

Quizplus · Accepted Answer

Real business cycle theory argues that fluctuations in economic activity are primarily caused by changes in productivity due to new technologies or improvements in existing technologies. Therefore, shocks to technology are seen as a significant driver of economic fluctuations in this theory.

Real Business Cycle Theory Emphasizes That Shocks to Technology Can