Real business cycle theory says that the factor leading to the business cycle is changes in
A) only aggregate demand.
B) the growth rate of the quantity of money.
C) animal spirits.
D) productivity.

Question

Quizplus · Accepted Answer

Real business cycle theory attributes the business cycle to changes in productivity, such as technological advances or changes in the availability and quality of resources, rather than changes in aggregate demand, the growth rate of the quantity of money, or animal spirits.

Real Business Cycle Theory Says That the Factor Leading to the Business