Question

The business cycle measures fluctuations in the long-run trend growth rate of GDP. fluctuations in the profit of businesses. fluctuations in consumption. short-run fluctuations in economic activity. fluctuations in the average tax rate paid by businesses.

Answer 1

Answer: short-run fluctuations in economic activity.

Explanation:

The business cycle helps explain fluctuations in economic activity within a period of time which makes it a short run measure. The cycle consists of expansion phases and recession phases which show that economic activity seems to expand and then go into a recession overtime.

The lowest point in the recession is called the depression and when this happens, the economy hits rock bottom and starts to expand after some time. This is what happened with the Great Depression and the Great Recession. The height of the expansion is the peak and here, the economy is at its most successful.