In the mainstream view, one major source of instability in the macroeconomy is the volatility of
A) product prices.
B) investment spending.
C) consumer spending.
D) labor wages.

Question

Quizplus · Accepted Answer

Investment spending, particularly in the business sector, can be volatile due to changes in business confidence, technological innovation, and other factors. This volatility can lead to fluctuations in economic growth and can potentially trigger recessions. While the other options (product prices, consumer spending, labor wages) can also have an impact on the macroeconomy, investment spending is often seen as a leading indicator of economic activity and is therefore considered a major source of instability.

In the Mainstream View, One Major Source of Instability in the Macroeconomy