According to real business cycle theory,the primary causes of business cycles are
A) shocks to aggregate demand.
B) monetary factors.
C) waves of self-fulfilling optimism and pessimism.
D) fiscal shocks.
E) technology shocks.

Question

Quizplus · Accepted Answer

Real business cycle theory suggests that fluctuations in business cycles are primarily caused by technology shocks, such as changes in productivity or technological advancements, rather than changes in aggregate demand, monetary factors, or fiscal shocks. Self-fulfilling optimism and pessimism are not considered significant factors in this theory.

According to Real Business Cycle Theory,the Primary Causes of Business