The idea that the business cycle is recurrent means that
A) declines in economic activity tend to be followed by further declines, and growth in economic activity tends to be followed by more growth.
B) the standard pattern of contraction—trough—expansion—peak occurs again and again in industrial economies.
C) many economic variables to move together in a predictable way over the business cycle.
D) peaks and troughs of the business cycle occur at regular intervals.
B
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If you go to the movies on Thursday night, the only cost to you is the price you pay for the movie ticket.
Answer the following statement true (T) or false (F)
If the government set a price floor at $24
A. there would a temporary surplus, then prices would fall to equilibrium.
B. there would be a permanent surplus, at least until the price floor was lifted.
C. the price floor would not have any effect on this market.
D. the price would rise to the equilibrium price.
When examining the financial status of households, wealth is
A) synonymous with income. B) a flow variable whereas income is a stock variable. C) a stock variable and includes both tangible assets and human capital. D) not as important as income because wealth does not change over time.
Fiscal policy is enacted through changes in:
A. Interest rates and the price level B. The supply of money and foreign exchange C. Unemployment and inflation D. Taxation and government spending