Real business cycle (RBC) theory predicts that the main source of economic fluctuations is

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RBC theory is based on the idea that fluctuations in real economic activity are primarily due to changes in the growth rate of productivity. This means that changes in the availability of technology or other factors that affect the production process can lead to shifts in economic output over time. Sticky money wage rates (A) and rational expectations based on complete information (B) may also have an impact on economic performance, but they are not seen as the primary drivers of business cycles according to RBC theory.

Real Business Cycle (RBC) Theory Predicts That the Main Source