Real business cycle theory suggests the business cycle is caused by:
A) discretionary monetary policy.
B) fluctuations in the rate of productivity.
C) "animal spirits."
D) protectionism.

Question

Quizplus · Accepted Answer

Real business cycle theory suggests that fluctuations in the rate of productivity (such as technological advances or changes in resource availability) are the primary drivers of the business cycle, rather than discretionary monetary policy, "animal spirits," or protectionism.

Real Business Cycle Theory Suggests the Business Cycle Is Caused