Problem
In the real business cycle model, suppose that government spending increases temporarily. Determine the equilibrium effects of this. Could business cycles be explained by fluctuations in G? That is, does the model replicate the key business cycle facts when subjected to temporary shocks to government spending? Explain carefully.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.