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CLopez678 CLopez678
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2 months ago
How do animal spirits affect GDP?
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Macroeconomics


Edition: 3rd
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chevy87chevy87
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Keynes believed in a phenomenon that he dubbed "animal spirits," which represent psychological factors that lead to changes in the mood of consumers and businesses, thereby affecting consumption, investment, and GDP. In Keynes's view, the animal spirits in an economy could fluctuate sharply even as the underlying fundamental features of the economy changed relatively little. For example, a period of heightened optimism could give way to a period of deep pessimism, even though the economic fundamentals—technology, physical capital, and human capital—had not changed much.

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CLopez678 Author
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2 months ago
Smart ... Thanks!
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You make an excellent tutor!
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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