According to the real business cycle theory, which of the following will NOT cause real output to change?
A)an expected change in money supply
B)an increase in material prices
C)a change in labor productivity
D)a technological advance
E)new and more efficient methods of production

Question

Quizplus · Accepted Answer

According to the real business cycle theory, changes in real output are caused by fluctuations in productivity, not changes in the money supply. Therefore, an expected change in the money supply will not cause real output to change.

According to the Real Business Cycle Theory, Which of the Following