1. In real business cycle theory, why can’t the change in the money supply prompted by a series of..

1. In real business cycle theory, why can’t the change in the money supply prompted by a series of events catalyzed by an adverse supply shock be considered the cause of the business cycle? 2. The expected inflation rate is 5 percent, and the actual inflation rate is 7 percent. According to Friedman, is the economy in long-run equilibrium? Explain your answer.