The factor leading to business cycles in the _______ cycle theory is unexpected fluctuations in aggregate demand while in the _______ cycle theory both unexpected and expected fluctuations in aggregate demand are factors that lead to business cycles.
A)new classical; monetarist
B)new Keynesian; Keynesian
C)real business; monetarist
D)monetarist; new Keynesian
E)new classical; new Keynesian

Question

Quizplus · Accepted Answer

In the new classical cycle theory, unexpected fluctuations in aggregate demand lead to business cycles. In the new Keynesian cycle theory, both unexpected and expected fluctuations in aggregate demand can cause business cycles.

The Factor Leading to Business Cycles in the _______ Cycle