The Factor Leading to Business Cycles in the ________ Cycle

question 64

Multiple Choice

The factor leading to business cycles in the ________ cycle theory is unexpected fluctuations in aggregate demand while in the ________ cycle theory both unexpected and expected fluctuations in aggregate demand are factors that lead to business cycles

• A)new classical; monetarist
• B)new Keynesian; Keynesian
• C)monetarist; new Keynesian
• D)new classical; new Keynesian

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Definitions:

Billion

A numerical value equivalent to 1,000 million, often used to denote a very large quantity or amount in financial and statistical contexts.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits one misses out on when making a decision.

Excess Capacity

Excess capacity refers to a situation where a company is operating below its maximum output level, indicating that it can produce more with the current resources if there is higher demand.

Expansionary Fiscal Policy

To fight recessions, the federal government lowers taxes and/or raises spending.