According to real business cycle theory,which of the following events is least likely to cause a recession?
A)A decline in the money supply
B)A decline in the capital stock
C)A decline in productivity
D)A decline in labor supply

Question

Quizplus · Accepted Answer

Real Business Cycle Theory emphasizes real shocks, such as changes in technology or productivity, as the main drivers of economic cycles. A decline in the money supply is more related to monetary policy and is not a primary factor in Real Business Cycle Theory, making it the least likely cause of a recession according to this theory.

According to Real Business Cycle Theory,which of the Following Events