Which theory emphasizes frequent changes in investment because of ʺanimal spiritsʺ as the main source of economic fluctuations?
A) new classical cycle theory
B) real business cycle theory
C) Keynesian cycle theory
D) monetarist cycle theory

Question

Quizplus · Accepted Answer

The Keynesian cycle theory emphasizes frequent changes in investment because of "animal spirits" as the main source of economic fluctuations. The theory posits that these animal spirits refer to the emotions, instincts, and urges that influence investors and entrepreneurs to make decisions about investment and production, leading to economic cycles of expansions and contractions.

Which Theory Emphasizes Frequent Changes in Investment Because of ʺAnimal