Question

The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are:

Answer 1

Answer:

c. capital goods and durable consumer goods.

Explanation:

Usually when we say business cycle fluctuations, we mean situations such as economic booms and then economic recession periods.

During Economic Booms capital goods and durable consumer goods which are usually expensive to purchase gets increase in demand as the consumers are buoyant economically to get such. For instance, buying houses, vehicles and expensive jewelry increases in demand during economic booms

During Economic Recessions the purchasing power of citizens reduce in the economy, hence, the ability to splurge on capital goods and durable consumer goods reduce.

For others such as clothing and education, military goods and capital goods and services and non-durable consumer goods, they are usually in demand goods and some what necessities that are fairly unaffected by economic booms and recessions.