Which of the following is true of real businesscycle models?
A)According to real business-cycle models the demand shocks are responsible for the business cycles.
B)According to real business-cycle models government intervention is responsible for business cycles.
C)According to real business-cycle models fluctuations in total factor productivity are responsible for business cycles.
D)According to real businesscycle models erratic monetary policies are responsible for business cycles.

Question

Which of the following is true of real business­cycle models?​
A)According to real business-cycle models the demand shocks are responsible for the business cycles.
B)According to real business-cycle models government intervention is responsible for business cycles.
C)According to real business-cycle models fluctuations in total factor productivity are responsible for business cycles.
D)​According to real business­cycle models erratic monetary policies are responsible for business cycles.

Quizplus · Accepted Answer

Real business-cycle models attribute business cycles to fluctuations in total factor productivity, which refers to changes in the efficiency and effectiveness of inputs used in the production process. This can include changes in technology, natural resources, and human capital. Demand shocks, government intervention, and erratic monetary policies are not emphasized in this model.

Which of the Following Is True of Real Business­cycle Models?​

Which of the Following Is True of Real Businesscycle Models?