Question

7. The business cycle depicts: A. fluctuations in the general price level. B. the phases a business goes through from when it first opens to when it finally closes. C. the evolution of technology over time. D. short-run fluctuations in output and employment

Answer 1

Answer:

D) short-run fluctuations in output and employment

Explanation:

The business cycle and the economic cycle are basically the same thing. They both refer to the fluctuations (growth and shrinkage) of the gross domestic product. It is usually divided into 4 periods:

• Expansion: the economy is growing, GDP is increasing, total economic output increases.
• Crisis: economic growth stops, and the GDP starts to fall
• Recession: the economy starts to shrink, and the GDP decreases. Total economic output decreases, as well as prices.
• Recovery: the economy hits a low point, and then starts to bounce back.