In the Keynesian view,the volatility of investment is primarily due to
A) technological advancements
B) waves of productivity change
C) "creative destruction": new industries destroying old ones
D) "animal spirits": unpredictable episodes of optimism and pessimism
E) erratic monetary policy by the central bank

Question

Quizplus · Accepted Answer

According to Keynesian economics, the volatility of investment is mainly due to "animal spirits," which refers to the unpredictable episodes of optimism and pessimism among investors. This can lead to fluctuations in investment spending and overall economic activity. Technological advancements, waves of productivity change, and "creative destruction" may also contribute to investment volatility, but they are not considered the primary factors in the Keynesian view. Erratic monetary policy by the central bank may also have an impact on investment, but it is not considered the main driver of volatility in the Keynesian framework.

In the Keynesian View,the Volatility of Investment Is Primarily Due