How many of the following business cycle facts can be explained if the primary cause of business cycles is temporary changes in total factor productivity: procyclical consumption, procyclical investment, procyclical employment, and procyclical real wages?
A) one
B) two
C) three
D) four
E) none

Question

Quizplus · Accepted Answer

Temporary changes in total factor productivity can affect all aspects of the economy, including consumption, investment, employment, and real wages. Therefore, all four of the mentioned business cycle facts can be explained by temporary changes in total factor productivity.

How Many of the Following Business Cycle Facts Can Be