Question

what are the basic structure of a prototype real business cycle model?​

Answer 1

Answer:

Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough. An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.

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.