The idea that business ﬂuctuations are primarily caused by factors affecting aggregate supply rather than aggregate demand is a central tenet of
A) eﬃciency wage theory.
B) real-business-cycle theory.
C) mainstream economics.
D) monetarism.

Question

Quizplus · Accepted Answer

The idea that business fluctuations are primarily caused by factors affecting aggregate supply rather than aggregate demand is a central tenet of the real-business-cycle theory. This theory suggests that economic cycles arise from changes in technology and resource availability, rather than from changes in demand.

The Idea That Business ﬂUctuations Are Primarily Caused by Factors