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one of the following is not a endogenous factors of business cycle
- a)War
- b)Changes in government spending
- c)Money supply
- d)Fluctuations in investments
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
one of the following is not a endogenous factors of business cyclea)Wa...
Endogenous factors are factors found within a business model that pertains to the economy pertaining to a specific product. Many businesses have natural annual business cycles where demand is higher at certain periods and lower at others. Prices go up because the cyclical demand is up.
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one of the following is not a endogenous factors of business cyclea)Wa...
Endogenous and Exogenous Factors of Business Cycle
Business cycle refers to the fluctuations in economic activity that occur over a period of time. There are several factors that contribute to the business cycle, which can be classified into two categories - endogenous and exogenous factors.
Endogenous factors are those factors that are generated within the economy and influence the business cycle. Exogenous factors, on the other hand, are those factors that are external to the economy and affect the business cycle.
Endogenous Factors
1. Changes in Aggregate Demand: Changes in aggregate demand, which is the total demand for goods and services in an economy, can affect the business cycle. An increase in aggregate demand can lead to an expansion in economic activity, while a decrease in aggregate demand can lead to a recession.
2. Changes in Aggregate Supply: Changes in aggregate supply, which is the total supply of goods and services in an economy, can also affect the business cycle. An increase in aggregate supply can lead to an expansion in economic activity, while a decrease in aggregate supply can lead to a recession.
3. Money Supply: Changes in the money supply can also have an impact on the business cycle. An increase in the money supply can lead to an expansion in economic activity, while a decrease in the money supply can lead to a recession.
4. Fluctuations in Investment: Fluctuations in investment can also affect the business cycle. An increase in investment can lead to an expansion in economic activity, while a decrease in investment can lead to a recession.
Exogenous Factors
1. Wars: Wars can have a significant impact on the business cycle. Wars can disrupt economic activity and lead to a recession.
2. Changes in Government Spending: Changes in government spending can also affect the business cycle. An increase in government spending can lead to an expansion in economic activity, while a decrease in government spending can lead to a recession.
In conclusion, all the factors mentioned above are important in understanding the business cycle. However, wars are an exogenous factor, while changes in government spending, money supply, and fluctuations in investment are endogenous factors.
Business cycle refers to the fluctuations in economic activity that occur over a period of time. There are several factors that contribute to the business cycle, which can be classified into two categories - endogenous and exogenous factors.
Endogenous factors are those factors that are generated within the economy and influence the business cycle. Exogenous factors, on the other hand, are those factors that are external to the economy and affect the business cycle.
Endogenous Factors
1. Changes in Aggregate Demand: Changes in aggregate demand, which is the total demand for goods and services in an economy, can affect the business cycle. An increase in aggregate demand can lead to an expansion in economic activity, while a decrease in aggregate demand can lead to a recession.
2. Changes in Aggregate Supply: Changes in aggregate supply, which is the total supply of goods and services in an economy, can also affect the business cycle. An increase in aggregate supply can lead to an expansion in economic activity, while a decrease in aggregate supply can lead to a recession.
3. Money Supply: Changes in the money supply can also have an impact on the business cycle. An increase in the money supply can lead to an expansion in economic activity, while a decrease in the money supply can lead to a recession.
4. Fluctuations in Investment: Fluctuations in investment can also affect the business cycle. An increase in investment can lead to an expansion in economic activity, while a decrease in investment can lead to a recession.
Exogenous Factors
1. Wars: Wars can have a significant impact on the business cycle. Wars can disrupt economic activity and lead to a recession.
2. Changes in Government Spending: Changes in government spending can also affect the business cycle. An increase in government spending can lead to an expansion in economic activity, while a decrease in government spending can lead to a recession.
In conclusion, all the factors mentioned above are important in understanding the business cycle. However, wars are an exogenous factor, while changes in government spending, money supply, and fluctuations in investment are endogenous factors.
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one of the following is not a endogenous factors of business cyclea)Warb)Changes in government spendingc)Money supplyd)Fluctuations in investmentsCorrect answer is option 'A'. Can you explain this answer?
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