According to Keynes, business cycles are due to variation

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According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations , in the

1. Marginal efficiency of capital
2. Marginal propensity to save
3. Marginal propensity to consumption
4. Marginal efficiency to investment

Correct Option: A

According to Keynes’ ‘General Theory of Employment, Interest and Money,’ business cycles are caused by variations in the rate of investment which are caused by fluctuations in the marginal efficiency of capital. Marginal efficiency of capital means the expected profits from new investments.