ECONOMICS
BUSINESS CYCLES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
True
|
|
|
False
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -main factors contribute to changes in the business cycle: business decisions; interest rates; consumer expectations; and external issues. When businesses increase production, they increase aggregate supply and help fuel an expansion. When they decrease production, supply decreases and a contraction may result.
Detailed explanation-2: -The business cycle is one of the largest drivers of business investment. As a recession occurs, businesses tend to see a decline in demand for their products, which leads them to reduce investment spending.
Detailed explanation-3: -Answer and Explanation: The true statement about business cycles is c. The loss of potential output can never be realized.
Detailed explanation-4: -Business cycle investing involves trying to anticipate and profit from changes in the business cycle. The goal is to buy assets likely to do well during certain business cycle phases and sell them before the next phase begins.