Keynes felt that the economic effects of business confidence,for example a loss confidence shifting the ________ curve to the left,were of ________ importance.

Question

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Keynes believed that changes in business confidence could significantly impact investment and, consequently, the overall economy. This is reflected in shifts in the IS curve, which represents the relationship between interest rates and levels of income in the goods market where investment plays a crucial role. A loss of confidence would likely reduce investment, shifting the IS curve to the left, and Keynes considered such effects to be of major importance.

Keynes Felt That the Economic Effects of Business Confidence,for Example