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Three of the choices below are main economic variables that affect business cycles.

Select the choice that is not a main economic variable that affects business cycles.

interest rates
external shocks
personal savings levels
business investment levels

User Ma Ming
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1 Answer

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Final answer:

Interest rates, external shocks, and business investment levels are significant economic variables impacting business cycles, whereas personal savings levels are not considered a main variable in this context.

Step-by-step explanation:

The list includes three economic variables that significantly impact business cycles: interest rates, external shocks, and business investment levels. However, personal savings levels are not considered a main economic variable affecting business cycles. Interest rates can influence the cost of borrowing and, consequently, impact business investment and consumer spending. External shocks refer to unexpected events that can disrupt economic activity, such as natural disasters or geopolitical events. Business investment levels are often responsive to changes in economic conditions and can fluctuate considerably, contributing to the cyclical nature of the economy. On the other hand, while personal savings do have an effect on the economy, they are not typically viewed as a main driver of business cycles.

User Christopher Janzon
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