Which Theory Emphasizes Frequent Changes in Investment Because of ʺAnimal

question 224

Multiple Choice

Which theory emphasizes frequent changes in investment because of ʺanimal spiritsʺ as the main source of economic fluctuations?

• A) new classical cycle theory
• B) real business cycle theory
• C) Keynesian cycle theory
• D) monetarist cycle theory

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Definitions:

Excess Reserves

The capital reserves held by a bank or financial institution in excess of what is required by regulators, central banks, or other governing bodies.

Recession

An interval of short-term economic slump, where commercial activities and industrial operations decline, often determined by a fall in GDP for two back-to-back quarters.

Federal Reserve Bank

The central banking system of the United States, which regulates the U.S. monetary and financial system.

Salt Lake City

The capital and most populous city of Utah, known for its historic significance to the Church of Jesus Christ of Latter-day Saints and its nearby saltwater lake.