A business cycle is the period of time in which:
a. a business is established and ceases operations.
b. there are four phases: peak, recession, trough and expansion.
c. the price level varies with real GDP.
d. expansion and contraction of economic activity are equal.
e. none of these are true.
b
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A tax is progressive if it raises a greater fraction of total tax revenue every year.
Answer the following statement true (T) or false (F)
An important cause of recessions is an unexpected negative supply shift, such as higher oil prices.
Answer the following statement true (T) or false (F)
In the long run
A. the price level is independent of the level of output. B. the level of output is independent of the price level. C. price and output levels are mutually dependent. D. the level of output is depends on the price level.
Real GDP is
A) an increase in the average level of prices. B) the value of total production when the unemployment rate is 6 percent. C) the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year. D) the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced.