Question

The Austrian Trade-Cycle Theory of the Business Cycle assumes:

                        a.) the recurrence of the business cycle is a monetary phenomenon.

                        b.) the non-neutrality of money. Money has a driving force of its own.

                        c.) mal-investments are introduced in the boom of the business cycle and not in

                              the bust of the cycle. Capital consumption is the characteristic feature of the

      bust of a non-financial crisis business cycle.

d.) all of the above.

Answer 1

Answer - Option C

Mal investments occur in the boom of the business cycle and not in the bust of cycle. Capital consumption is the charateristic feature of bust and non financial crisis of business cycle.

This statement is true with respect to Autralian business cycle