Critics of real business cycle theory doubt the plausibility of ________.
A)intertemporal substitution
B)negative productivity shocks
C)adaptive expectations
D)a trade-off between work and leisure

Question

Quizplus · Accepted Answer

Critics of real business cycle theory doubt the plausibility of negative productivity shocks, as these shocks are considered rare and insufficient to explain the magnitude of economic fluctuations observed in the real world. Intertemporal substitution, adaptive expectations, and the trade-off between work and leisure are all elements of the theory that are generally accepted but may also have some limitations.

Critics of Real Business Cycle Theory Doubt the Plausibility of ________