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 labour force
C) a change in the money supply
D) a change in the real quantity of government purchases

Question

Quizplus · Accepted Answer

Real business cycle theory suggests that business cycle fluctuations are primarily caused by changes in technology and productivity, shocks to the availability of resources, and changes in consumer preferences. Changes in the money supply are not seen as a primary cause of fluctuations according to this theory.

Which of the Following Is Not a Primary Cause of Business