Most Economists Agree That the Immediate Cause of Most Business

question 89

Multiple Choice

Most economists agree that the immediate cause of most business cycle variation is

• A) an unexpected change in the productivity of workers.
• B) an unexpected change in the level of total spending.
• C) the invention of new products.
• D) the growth and subsequent bursting of financial bubbles.

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Definitions:

Transactions Demand

The demand for money as a medium of exchange, reflecting the desire to hold money for everyday transactions.

Banks Create Money

The process by which commercial banks lend more than the reserves they hold, effectively creating new money through the issuance of loans.

Large Denomination

Currency units or financial instruments that represent a large value, making them efficient for high-value transactions but also potentially attractive for illicit activities.

Economic Conditions

The state of the economy at a given time, including factors such as employment rates, inflation rates, and gross domestic product.