Alternating periods of economic growth and contraction are
A)The result of government intervention according to Keynes.
B)The result of recurrent shifts of aggregate demand and aggregate supply.
C)Indicative of an unstable economy and require government intervention according to classical economists.
D)Not typical of the U.S. economy.

Question

Quizplus · Accepted Answer

Alternating periods of economic growth and contraction are primarily the result of recurrent shifts of aggregate demand and aggregate supply. These shifts can be due to various factors such as changes in consumer sentiment, government policies, business investment, and international trade. While government intervention can sometimes mitigate the effects of economic fluctuations, it is not always necessary or effective in every situation. Classical economists generally believe that the economy is self-correcting and will naturally return to equilibrium after a downturn, while Keynesians advocate for government intervention during times of economic distress. Economic fluctuations are a normal occurrence in market-based economies, and the U.S. economy has experienced many cycles of growth and contraction throughout its history.

Alternating Periods of Economic Growth and Contraction Are