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

Question

Quizplus · Accepted Answer

The real business cycle theory posits that random fluctuations in productivity, caused by technology changes or other factors, are the primary cause of economic fluctuations. This theory emphasizes how real (not nominal) shocks to the economy can lead to cycles of expansion and contraction.

The Theory That Regards Random Fluctuations in Productivity as the Main