The model used to study business cycles is the _____ model

Business Dec 23, 2020

The model used to study business cycles is the _____ model.

a. labor

b. savings

c. growth

d. aggregate demand-aggregate supply

e. interest rate

Expert Solution

The correct option is (d). Aggregate demand-aggregate supply.

Usually, the fluctuations in the business cycle are related to the aggregate demand and aggregate supply model wherein a rise in the aggregate demand and aggregate supply is indicative of the boom period and a decline in the aggregate demand and aggregate supply is indicative of the recessionary period. Thus, the aggregate demand-aggregate supply model is a model that is used to study the business cycle fluctuations.

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