"Animal spirits" is a term used in economics to describe the emotions and instincts that drive human behavior in financial markets. It refers to the confidence or fear that investors feel, which can influence their decisions to buy or sell assets. When animal spirits are high, people are more likely to invest, leading to economic growth. Conversely, low animal spirits can result in reduced spending and investment, potentially causing economic downturns. The concept was popularized by the economist John Maynard Keynes, who believed that these psychological factors play a crucial role in economic cycles. Animal spirits can be affected by various factors, including news events, market trends, and overall economic conditions, making them an essential aspect of understanding market dynamics.