In the real business cycle model, the quantity of money
A) can change the real wage rate.
B) can increase the real interest rate.
C) has no effect on real GDP.
D) can decrease the effect from technology shocks.

Question

Quizplus · Accepted Answer

In the real business cycle model, the quantity of money is considered neutral in the long run, meaning it does not affect real variables such as real GDP. This model focuses on real, not monetary, causes of economic fluctuations.

In the Real Business Cycle Model, the Quantity of Money