According to real business cycle theory, the primary causes of business cycles are
A)shocks to aggregate demand.
B)monetary factors.
C)technology shocks.
D)waves of self-fulfilling optimism and pessimism.
E)fiscal shocks.

Question

Quizplus · Accepted Answer

Real business cycle theory posits that fluctuations in the economy are primarily caused by changes in technology and productivity. These changes affect the real (as opposed to nominal) output and employment levels, leading to fluctuations in economic activity.

According to Real Business Cycle Theory, the Primary Causes of Business