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 ▸Explain why and when government spending leads to inflation
explain the effect of a rise in government expenditure in the AD-AS framework
Explain which barriers to entry an new airline might face when entering the international flight market
Assess the importance of education and training to improve labour productivity in the UK.