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.
Related Economics A Level answers
All answers ▸What are economies of scale?
Why does lowering interest rates boost aggregate demand?
Perfect competition theory is based on very unrealistic assumptions. Evaluate whether such a theory is useful in explaining the behaviour of real world firms.
Explain the meaning of opportunity cost?