In real business cycle theory, all of the following events can be sources of fluctuations in productivity EXCEPT .
A) climate fluctuations
B) the pace of technological change
C) the growth rate of money
D) natural disasters

Question

Quizplus · Accepted Answer

Real business cycle theory focuses on productivity shocks that arise from changes in technology, changes in the availability of inputs (e.g. labor, capital), or changes in government policies. The growth rate of money, on the other hand, is a variable that is typically associated with nominal rather than real economic activity, and is therefore not considered to be a source of fluctuations in productivity. Climate fluctuations, the pace of technological change, and natural disasters are all examples of real shocks that can affect productivity and output levels in the short term.

In Real Business Cycle Theory, All of the Following Events