Fluctuations in business confidence is the factor leading to business cycles in the .
A) new Keynesian cycle theory
B) monetarist cycle theory
C) new classical cycle theory
D) Keynesian cycle theory

Question

Quizplus · Accepted Answer

Fluctuations in business confidence is a key factor in the Keynesian cycle theory, which emphasizes the role of aggregate demand and government intervention in stabilizing the economy during recessions. The new Keynesian cycle theory also incorporates microeconomic considerations, such as sticky prices and wages, but still places a central focus on fluctuations in aggregate demand. The monetarist cycle theory emphasizes the role of money supply in driving business cycles, while the new classical cycle theory emphasizes the importance of rational expectations and market efficiency in shaping economic outcomes.

Fluctuations in Business Confidence Is the Factor Leading to Business