When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:
A)"what factors move the economy away from long-run equilibrium?"
B)"what factors move aggregate demand and aggregate supply in different directions?"
C)"what factors increase or decrease potential GDP?"
D)"what factors increase or decrease the expected rate of inflation?"

Question

Quizplus · Accepted Answer

The fundamental causes of business cycles are factors that move the economy away from long-run equilibrium, causing fluctuations in output and employment.

When Using the AD-AS Model to Understand Business Cycles, the Question