According to the real business cycle theory, ________ are responsible for economic growth.
A) expansionary fiscal and monetary policies
B) positive shifts in the AD curve
C) trade and income policies
D) positive shifts in the AS curve

Question

Quizplus · Accepted Answer

According to the real business cycle theory, economic growth is primarily driven by positive shifts in the AS (aggregate supply) curve, which can be caused by various factors such as technological advancements, improvements in productivity, and increases in labor force participation. Expansionary fiscal and monetary policies and trade and income policies are not considered to be major drivers of economic growth in this theory. Positive shifts in the AD (aggregate demand) curve may lead to short-term increases in output, but they are not considered sustainable sources of long-term economic growth.

According to the Real Business Cycle Theory, ________ Are Responsible