The cycle theory states that only unexpected fluctuations in aggregate demand are the main source of business cycles.
A) Keynesian
B) new classical
C) new Keynesian
D) monetarist

Question

Quizplus · Accepted Answer

The cycle theory that unexpected fluctuations in aggregate demand are the main source of business cycles is a key tenet of new classical macroeconomics. This school of thought emphasizes the importance of rational expectations, price flexibility, and the neutrality of money in the economy.

The Cycle Theory States That Only Unexpected Fluctuations in Aggregate