An Important Critique of Real Business Cycle Theory Is the Belief

question 18

Multiple Choice

An important critique of real business cycle theory is the belief that cyclical movements in total factor productivity

• A)are too small to account for the size of fluctuations in real GDP.
• B)does not explain the overall fluctuations in the business cycle.
• C)may, in part, be an artifact of measurement error.
• D)rarely occur.
• E)lead to imperceptible changes in labour demand.

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