What are the two main components of business cycle theories?
A)A description of shocks and a model of how the economy responds to them
B)A model of how people decide to spend and a description of the government's role in the economy
C)A model of how equilibrium is reached and a description of the government's role in the economy
D)A description of shocks and a description of the government's role in the economy

Question

Quizplus · Accepted Answer

The two main components of business cycle theories are a description of shocks (such as changes in technology or government policies) and a model of how the economy responds to them. These models aim to explain fluctuations in economic activity over time, including booms and busts. Other factors, such as how people decide to spend or the government's role in the economy, may also be included in these models, but they are not the primary components.

What Are the Two Main Components of Business Cycle Theories