In the real business cycle model the causes of business cycles are:
A) Sticky wages and prices.
B) Technology shocks.
C) Unanticipated price level changes.
D) Changes to aggregate demand.

Question

Quizplus · Accepted Answer

According to the real business cycle model, business cycles are primarily caused by technology shocks, which affect productivity and output in the economy. Other factors such as sticky wages and prices, unanticipated price level changes, and changes to aggregate demand are seen as secondary or less important factors in causing business cycles.

In the Real Business Cycle Model the Causes of Business