The factor leading to business cycles in the real business cycle theory is changes in the growth rate of

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According to the real business cycle theory, fluctuations in productivity are the primary factor contributing to business cycles. This theory asserts that economic fluctuations are the result of real shocks to the economy, such as changes in technology or changes in the availability of resources. These real shocks affect the level of output, employment, and other macroeconomic variables. Other factors, such as changes in the money supply or wage rates, are seen as secondary or tertiary factors that may amplify or dampen the effects of real shocks, but are not the primary cause of business cycles.

The Factor Leading to Business Cycles in the Real Business