Real-business-cycle theory suggests that changes in
A)monetary policy are the single most important cause of macroeconomic instability.
B)investment spending will have a direct and significant effect on aggregate demand.
C)technology and resources affect productivity, and thus the long-run growth of aggregate supply.
D)the velocity of money is gradual and predictable, and thus is able to accommodate the long-run changes in nominal GDP.

Question

Quizplus · Accepted Answer

Real-business-cycle theory posits that changes in technology and resources affect productivity, which in turn influences the long-run growth of aggregate supply, rather than focusing on monetary policy or demand-side factors.

Real-Business-Cycle Theory Suggests That Changes in