What are the two main components of business cycle theories?
A)a description of shocks and a model of how the economy responds to them
B)a model of how people decide to spend and a description of the government's role in the economy
C)a model of how equilibrium is reached and a description of the government's role
D)a description of shocks and a description of the government's role in the economy

Question

Quizplus · Accepted Answer

The two main components of business cycle theories are a description of shocks, such as changes in technology, monetary policy, or sudden changes in demand, and a model of how the economy responds to them. These theories often examine the patterns of expansion and contraction in economic activity over time. While the government's role in the economy can be a factor, it is not a central component of business cycle theories.

What Are the Two Main Components of Business Cycle Theories