In monetarist business cycle theory, the factor leading to a business cycle is changes in
A) investment spending.
B) the growth rate of the quantity of money.
C) net exports.
D) consumer spending.

Question

Quizplus · Accepted Answer

In monetarist business cycle theory, fluctuations in the quantity of money cause changes in aggregate demand, leading to changes in output, employment, and prices. Therefore, the growth rate of the quantity of money is the factor leading to business cycles.

In Monetarist Business Cycle Theory, the Factor Leading to a Business