"Animal spirits" refers to:
A) the stubborn refusal of many economic decision- makers to use rational expectations.
B) the impact of tax- evasion on the budget deficit.
C) the often- observed central banks' refusal to cooperate with the government in setting its monetary policy.
D) movements in investment that cannot be explained by changes in current variables.
E) an exotic alcoholic drink favoured by Wall Street traders.

Question

Quizplus · Accepted Answer

"Animal spirits" refer to movements in investment that cannot be explained by changes in current variables. It is a term used by economists to describe the emotional and psychological factors that can influence an investor's judgment and decision-making, causing them to act in ways that are not entirely rational. This can lead to market volatility and economic instability.

"Animal Spirits" Refers To