ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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recessions
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business cycle
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output yo-yos
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Consumer Price Index
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Detailed explanation-1: -Recurring upswings and downswings in an economy’s real GDP over time are called: business cycles.
Detailed explanation-2: -A business cycle is a cycle of fluctuations in the Gross Domestic Product (GDP) around its long-term natural growth rate. It explains the expansion and contraction in economic activity that an economy experiences over time.
Detailed explanation-3: -Business cycles are a type of fluctuation found in the aggregate economic activity of a nation–a cycle that consists of expansions occurring at about the same time in many economic activities, followed by similarly general contractions (recessions). This sequence of changes is recurrent but not periodic.
Detailed explanation-4: -A sustained period in which real GDP is rising is an expansion; a sustained period in which real GDP is falling is a recession.
Detailed explanation-5: -Most economists agree that the immediate cause of most business cycle variation is: an unexpected change in the level of total spending. An unexpected increase in total spending will cause an increase in GDP: if prices are sticky.