The concept of "animal spirits" in Keynesian theory refers to:

CA Foundation · Business Economics · MTP · May 2026
The concept of "animal spirits" in Keynesian theory refers to:
(A) A. The unpredictable behaviour of financial markets
(B) B. Psychological factors influencing economic decisions
(C) C. Government regulations affecting business confidence
(D) D. The impact of interest rates on investment

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Psychological factors influencing economic decisions

Topics: Determination of National Income

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