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 labor force
C)A change in the money supply
D)A change in the real quantity of government purchases

Question

Quizplus · Accepted Answer

According to real business cycle theory, fluctuations in the business cycle are primarily caused by changes in productivity or technology shocks, changes in preferences or changes in the availability of resources. Changes in the money supply or government purchases are considered to be secondary factors that may amplify or dampen the effects of these primary causes, but they are not considered to be primary causes themselves.

Which of the Following Is Not a Primary Cause of Business