Which of the following describes the Keynesian approach to the business cycle?
I. Unanticipated shocks to aggregate supply drive expansions and recessions.
II. The Keynesian theory is a real business cycle model of the economy.
III. A decrease in business confidence can trigger a recession.
A) III only
B) I only
C) I and II
D) II and III

Question

Quizplus · Accepted Answer

Keynesian economics emphasizes the role of demand-side factors, such as changes in business confidence, in driving economic fluctuations, rather than supply-side shocks or real business cycle models.

Which of the Following Describes the Keynesian Approach to the Business