The view that the trade cycle is a purely monetary phenomenon driven b…

Question

The view that the trade cycle is a purely monetary phenomenon driven by unplanned changes in the money supply is associated in the chapter with:

Accepted Answer

C. Hawtrey

1. The chapter states that, according to Hawtrey, the trade cycle is a purely monetary phenomenon.
2. Unplanned changes in money supply cause the fluctuation.
3. So the correct choice is Hawtrey.
4. Pigou (psychological optimism/pessimism), Schumpeter (innovations), and Keynes (effective demand) are ruled out.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 5 "Business Cycles", p.8_

Answer

Pigou

Answer

Schumpeter

Answer

Keynes

The view that the trade cycle is a purely monetary phenomenon driven by unplanned changes in the money supply is associated in the chapter with:

Keep practising Unit 1A: Scarcity, Choice and Opportunity Cost