The factor that leads to business cycle events within real business cycle theory is represented by
A) changes in the growth rate in productivity.
B) changes in the growth rate in the quantity of money.
C) adverse shocks to international trade.
D) changes in expected future sales and profits of firms.

Question

Quizplus · Accepted Answer

Real Business Cycle Theory attributes business cycle events primarily to changes in technology and productivity, rather than monetary or external factors. This theory suggests that productivity growth can lead to expansions, while productivity declines can cause recessions.

The Factor That Leads to Business Cycle Events Within Real