The Real Business Cycle Theory

Multiple Choice

The real business cycle theory

A) refutes the notion that macroeconomics should be built on microeconomic foundations
B) asserts that even though markets may clear rapidly, output can still fluctuate greatly if, for example, labor productivity changes
C) supports the notion that changes in money supply are primarily responsible for changes in real output
D) asserts that economic fluctuations are caused by the banking system which fails to adequately expand money supply to accommodate a boom
E) none of the above