Real business cycle theory argues that the primary cause of business cycles is fluctuations in

Question

Quizplus · Accepted Answer

Real business cycle theory posits that business cycles are primarily caused by fluctuations in total factor productivity, such as advancements in technology or changes in production efficiency. This view suggests that government intervention or monetary policy may not be effective in smoothing out the business cycle over the long run.

Real Business Cycle Theory Argues That the Primary Cause of Business