Which of the following is NOT a primary cause of business cycle fluctuations,according to real business cycle theory?
A)a change in the production function
B)a change in the size of the labour force
C)a change in the money supply
D)a change in the real quantity of government purchases

Question

Quizplus · Accepted Answer

Real business cycle theory posits that business cycle fluctuations are primarily caused by changes in technology, productivity, and other real factors, rather than monetary policy or other nominal factors. Therefore, changes in the money supply (C) would not be considered a primary cause of business cycle fluctuations according to this theory. Instead, A, B, and D would all be considered important factors in explaining fluctuations in output and employment.

Which of the Following Is NOT a Primary Cause of Business