Ayushi Asked a Question
August 25, 2020 9:42 pmpts 30 pts
60. Which of the following statement about the Real Business Cycle theory is false? (1) It argues that trade cycle is caused by supply side factors (2) A very popular versíon of the theory has been given by Kidland and Prescott (3) It argues that increase in supply of money can cause cycles )It treats technology shock as an important factor for emergence of cycles
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  • Nidhi taparia Best Answer
    Option (3) is the answer. Real business cycle theory suggests that nominal or money supply related changes do not cause business cycles.
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