According to Hawtrey, the business cycle is caused by
A)variation in the interest of banking system
B)variation in the price level of the economy
C)variation in the money supply by bank
D)all the above

Question

Quizplus · Accepted Answer

Hawtrey believed that the business cycle is primarily caused by variations in the interest rates set by the banking system, which in turn affects the money supply and the price levels in the economy. Thus, all the given options are considered causes of the business cycle according to Hawtrey's theory.

According to Hawtrey, the Business Cycle Is Caused by