Question:

What are the two main components of business cycle theories?

A.

a description of shocks and a model of how the economy responds to them

B.

a model of how people decide to spend and a description of the government’s role in the economy

C.

a model of how equilibrium is reached and a description of the government’s role in the economy

D.

a description of shocks and a description of the government’s role in the economy

Answer» a. a description of shocks and a model of how the economy responds to them