The factor that leads to business cycles within Keynesian cycle theory is
A) fluctuations in business confidence.
B) adverse shocks to international trade.
C) the growth rate in the quantity of money.
D) the growth rate in labor productivity.

Question

Quizplus · Accepted Answer

According to Keynesian cycle theory, fluctuations in business confidence lead to business cycles. These fluctuations in confidence can lead to changes in investment and consumer spending, which then affect overall economic output.

The Factor That Leads to Business Cycles Within Keynesian Cycle