A business cycle is the:
a. period of time in which expansion and contraction of economic activity are equal.
b. period of time in which there are three phases: peak, depression, and recovery.
c. recurring growth and decline in real GDP.
d. period of time in which a business is established and ceases operations.
c
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The biggest wave of bank failures in the U.S. occurred:
A) during the Great Depression. B) before the Great Depression. C) during 2007 to 2009. D) in the early 1990s.
Which of the following is likely to happen if consumption in an economy falls?
A) Asset prices rise. B) Mortgage defaults fall. C) Labor supply falls. D) Layoffs rise.
If the cross elasticity of demand between goods X and Y is positive and between goods X and Z is negative, then X and Y are ________ and X and Z are ________
A) price inelastic; complements B) complements; substitutes C) substitutes; complements D) price inelastic; income elastic
Suppose the current unemployment rate is 15 percent. If it rises to 20 percent
A) the economy will move up along the production possibilities curve. B) the economy will move closer to the production possibilities curve. C) the production possibilities curve will shift inward. D) the economy will operate farther inside the production possibilities curve.