The explanation of fluctuations in aggregate economic activity is one of the primary concerns of macroeconomics . The main framework for explaining such fluctuations is Keynesian economics . In the Keynesian view, business cycles reflect the possibility that the economy may reach short-run equilibrium at levels below or above full employment . If the economy is operating with less than full employment, ., with high unemployment , Keynesian theory states that monetary policy and fiscal policy can have a positive role to play in smoothing the fluctuations of the business cycle.
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