What Are the Two Main Components of Business Cycle Theories

question 58

Multiple Choice

What are the two main components of business cycle theories?

• A)a description of shocks and a model of how the economy responds to them
• B)a model of how people decide to spend and a description of the government's role in the economy
• C)a model of how equilibrium is reached and a description of the government's role
• D)a description of shocks and a description of the government's role in the economy

---

Definitions:

Compounded Quarterly

Calculating interest by adding previously earned interest to the principal amount at the end of every quarter, leading to an increase in the interest amount over periods.

Compounded Annually

Interest computed annually on the initial sum as well as on the interest accrued in past periods.

Professional Hockey

A sport involving two teams of skaters using sticks to shoot a puck into the opponent's net, played at a professional level.

Investments

Assets or items acquired with the goal of generating income or appreciation over time.