Keynes believed that the main cause of swings in the business cycle is change in:
A) aggregate expenditures.
B) the money supply.
C) short-run aggregate supply.
D) interest rates.

Question

Quizplus · Accepted Answer

Keynes argued that fluctuations in aggregate demand, primarily influenced by changes in aggregate expenditures (which include consumption, investment, government spending, and net exports), are the primary cause of business cycle swings. He emphasized the role of investment and consumption decisions in driving economic cycles, rather than focusing primarily on changes in the money supply or interest rates.

Keynes Believed That the Main Cause of Swings in the Business