In real business cycle models, business cycles exist because of
A) repeated errors by Congress in timing policy changes.
B) policy errors by the Fed.
C) changes in technology.
D) frequent changes in the public's labor supply.

Question

Quizplus · Accepted Answer

In real business cycle models, business cycles are driven by changes in technology that affect the productivity of workers and firms, leading to fluctuations in output and employment. Choices A, B, and D do not accurately capture the mechanisms behind business cycles in these models.

In Real Business Cycle Models, Business Cycles Exist Because of