Which business cycle model believes that then policy measures designed to reduce deviations from trend are misguided.
A) The real business cycle.
B) The supply-side new classical model.
C) The demand-side Keynesian model.
D) The supply-side Keynesian model

Question

Quizplus · Accepted Answer

The real business cycle model asserts that business cycles are primarily driven by changes in technology and productivity, and that government intervention to correct deviations from trend is ineffective. This model suggests that the economy will naturally self-correct, and that efforts to artificially stimulate demand or adjust interest rates through monetary policy can potentially do more harm than good.

Which Business Cycle Model Believes That Then Policy Measures Designed