In real business cycle theory, the factor leading to a business cycle is represented by
A) changes in investment.
B) changes in the quantity of money.
C) unexpected changes in aggregate demand.
D) fluctuations in the pace of technological change.

Question

Quizplus · Accepted Answer

Real Business Cycle Theory attributes business cycles to fluctuations in the pace of technological change, arguing that these technological changes affect productivity, which in turn influences economic growth and leads to cycles.

In Real Business Cycle Theory, the Factor Leading to a Business