Question

"Models that use​ factors, such as technology​ shocks, to explain fluctuations in real GDP instead of changes in the money supply are called A. real monetary models. B. monetary business cycle models. C. real technology models. D. real business cycle models."

Answer 1

D. real business cycle models.

Step-by-step explanation:

The theory of real business cycles explains short-run economic fluctuations based on the assumptions of the classical theory. Real business-cycle (or 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 shocks.

According to this theory, business cycles are the natural and efficient response of the economy to economic environment. Contrary to what Keynesian, Monetarist, and new classical economicsts believed, RBC theorists, starting with Nelson and Plosser in 1982, found that the hypothesis that GDP growth follows a random walk cannot be rejected. They argued that most of the changes in GDP were permanent, and that output growth would not revert to an underlying trend following a shock.

Answer 2

Real business cycle models

Step-by-step explanation:

Real business cycle models adopts the use of technological shocks and changes in productivity rather than the value of aggregate demand to explain the fluctuation in the economy.

It is based on the assumption that the economy is affected by the fluctuation in turning input to output as a result of variation in technological input. This fluctuation in technology also affect the level of employment as well.