If business cycles are caused by changes in aggregate demand,you would expect to see
A)prices and unemployment moving in the same direction.
B)price and unemployment moving in opposite directions.
C)prices not moving with unemployment.
D)unemployment is not included in the Keynesian model.

Question

Quizplus · Accepted Answer

When business cycles are caused by changes in aggregate demand, typically, prices and unemployment move in opposite directions. This is because when aggregate demand increases, prices tend to rise while unemployment falls (due to increased production needs), and vice versa.

If Business Cycles Are Caused by Changes in Aggregate Demand,you