How does business confidence affect the economic cycle? And why?

If a business has low levels of confidence in the economy there will be lower levels of investment and so lower economic growth. This will likely result in economic recession where the economy contracts for two consecutive quarters.

Answered by Economics tutor

6630 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain how a price ceiling imposed by governments in major rice-producing countries might affect world rice markets.


Explain the possible causes of deflation in an economy. (15)


Discuss how a business may practice 3rd degree price discrimination


How do I explain what effect an increase in government spending may have on unemployment and inflation in an economy?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning