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) I only
B) III only
C) I and II
D) II and III

Question

Quizplus · Accepted Answer

The Keynesian approach emphasizes demand-side factors, such as changes in business confidence, as drivers of the business cycle, rather than supply-side shocks or the real business cycle model.

Which of the Following Describes the Keynesian Approach to the Business