Most economists believe that the immediate cause of cyclical changes in the levels of real output and employment is:

Question

Quizplus · Accepted Answer

Most economists agree that fluctuations in the level of total spending (aggregate demand) are the primary cause of cyclical changes in real output and employment. These fluctuations can be caused by changes in consumer and business confidence, government spending, investment, and exports. Changes in productivity and technology are important factors in the long run but do not typically cause short-term fluctuations in the business cycle. Changes in the money supply can also affect the business cycle, but the Federal Reserve generally adjusts the money supply in response to changes in total spending rather than as a direct cause of economic fluctuations.

Most Economists Believe That the Immediate Cause of Cyclical Changes