According to real business cycle theory, booms and recession will come to an end because aggregate supply will eventually stop shifting once the shock has worked its way through the economy.

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Real Business Cycle Theory posits that business cycles are largely due to changes in technology or external shocks, and once these shocks have been absorbed by the economy, the shifts in aggregate supply will stabilize, leading to the end of booms and recessions.

According to Real Business Cycle Theory, Booms and Recession Will