12. The main economic variables that affect business cycles include all the following EXCEPT.
A. Interest rates
B. External Events
C. Personal Savings levels
D. Business investments levels
To determine the correct answer, we need to understand what the main economic variables that affect business cycles are. Business cycles refer to the fluctuations in economic activity that occur over a period of time, characterized by alternating periods of expansion and contraction.
The main economic variables that typically have an impact on business cycles are as follows:
A. Interest rates: Changes in interest rates can affect borrowing costs and investment decisions. Higher interest rates may discourage borrowing and business investment, which could lead to a contraction in economic activity.
B. External Events: Events such as changes in government policies, wars, natural disasters, or geopolitical tensions can have significant effects on business cycles. These events can disrupt economic activity, affect consumer and business confidence, and impact investment decisions.
C. Personal Savings Levels: Personal savings levels can influence the level of consumer spending, which in turn affects business activity. Higher personal savings may indicate lower consumer spending, potentially leading to decreased business activity during a contraction phase of the business cycle.
D. Business Investment Levels: Business investments, such as capital expenditure on new equipment, machinery, or research and development, can impact the overall level of economic activity. Higher levels of business investment can stimulate economic growth during an expansion phase, while decreased investment can contribute to a contraction phase.
Now, considering the given options:
A. Interest rates: This is a valid economic variable that affects business cycles.
B. External Events: This is also a valid economic variable that affects business cycles.
C. Personal Savings Levels: This is a valid economic variable that affects business cycles.
D. Business Investment Levels: This is a valid economic variable that affects business cycles.
Therefore, the answer is none of the above; all of the options listed (A, B, C, and D) are economic variables that can impact business cycles.