Keynesians believe that the most important shocks for affecting the business cycle are

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Keynesians believe that the most important shocks for affecting the business cycle are aggregate demand shocks. They argue that changes in aggregate demand, brought about by changes in government spending, taxes, or monetary policy, can have significant impacts on output and employment levels. Productivity shocks and aggregate supply shocks are also important, but Keynesians believe that these are less significant for explaining short-term fluctuations in output and employment. Government spending shocks may be important in the short run, but their long-term impacts are less clear.

Keynesians Believe That the Most Important Shocks for Affecting the Business