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mariacipri Group Title

Which of the following is a main economic variable that affects business cycles? A. stagflation B. national income accounting C. interest rates D. personal savings

  • 2 years ago
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  1. gregoryojano125 Group Title
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    Interest rates

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  2. forecasterJLGD Group Title
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    A. Stafglation

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  3. Hermeezey Group Title
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    Personal Savings. Personal savings determine interest rates, since interest is just a price for borrowing money. If there are a lot of savings (like during a recession), then money supply is high and interest rate is low. If there is a lot of investing (like during an expansion), then money supply is low and interest rates are high. By definition a business cycle is the repeating process of savings exceeding investing and vice versa.

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  4. vinrar Group Title
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    c.) interest rates Because, Business cycle has four stages: (i) expansion (increase in production and prices, low interests rates); (ii) crisis (stock exchanges crash and multiple bankruptcies of firms occur); (iii) recession (drops in prices and in output, high interests rates); (iv) recovery (stocks recover because of the fall in prices and incomes).so interest rates comes in first stage hence a main economic variable

    • 2 years ago
  5. Economist1 Group Title
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    Hello mariacipri, Interest rates could be an economic variable that affect business cycles. I say this because as a variable interest rates fluctuate in economies. The rate of the interest affects the way business functions. Loans for example are affected by interest rates. Thank you and have a great day. Economist 1

    • 2 years ago
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