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 is deadweight welfare loss and how is it shown on a market failure diagram?
Evaluate the extent to which policies to increase economic growth may conflict with the objectives of other policies (20)
What are the effects on UK businesses after an increase in fuel prices?
Explain what you understand by the Lorenz Curve and Gini Coefficient.