Question

Describe the basic
structure of a prototype Real Business Cycle model.

Answer 1

Hey frnd

Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations to a large extent can be accounted for by real (in contrast to nominal) shocks. Unlike other leading theories of the business cycle.

Hope this helps u frnd

Answer 2

The basic structure of a prototype Real Business Cycle model

• Real business-cycle theory (RBC theory) is a subset of modern traditional macroeconomics models in which business-cycle variability can be compensated for in large measure by true (unlike nominal) shocks. Unlike other leading business-cycle proposals.
• According to the RBCT, production, jobs, usage, spending, and productivity variations are all normal and beneficial reactions to the eventual shifts in the macroclimate. Shocks at the capacity of the industry to generate goods and services change the normal job and production levels.

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