Under Keynesianism, business cycles are driven by the aggregation of individual decisions over

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Keynesianism attributes the ups and downs of business cycles to the interplay of households' spending and saving decisions. According to the theory, when households cut back on spending, businesses reduce their production and employment, leading to a contraction of economic activity. Conversely, when households increase their spending, businesses expand their output and hiring, fueling economic expansion. In other words, the economy's performance hinges on the overall balance between spending and saving, and government policies can intervene to stabilize aggregate demand and prevent prolonged periods of recession or inflation.

Under Keynesianism, Business Cycles Are Driven by the Aggregation of Individual