The major catalyst behind aggregate demand fluctuations is
A)monetary and fiscal policy.
B)changes in the labor force.
C)overall liquidity of the financial system.
D)changes in stock prices.

Question

Quizplus · Accepted Answer

Monetary and fiscal policy are the major catalysts behind aggregate demand fluctuations. Monetary policy refers to the actions taken by a central bank to stabilize the economy by controlling the money supply and interest rates. Fiscal policy refers to the government's decisions about taxation and public spending to influence the economy. Both policies affect aggregate demand and can cause fluctuations in the economy. Changes in the labor force, overall liquidity of the financial system, and changes in stock prices may also affect aggregate demand, but they are not the major catalysts behind fluctuations.

The Major Catalyst Behind Aggregate Demand Fluctuations Is