Question

Which of the following statements about the business cycle is correct?

A.) Economies expand for about a decade and then contract for about five years.
B.) Economies contract for about a decade and then expand for about five years.
C.) Busts and booms are independent of political decisions.
D.) Certain financial actions are more profitable in busts and others more profitable in booms.

Answer 1

The statement “Certain financial actions are more profitable in busts and others more profitable in booms” is correct about the business cycle.

Used in the indefinite sense, a business cycle is a period of time containing a single boom and contraction in sequence. Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable.

The correct answer between all the choices given is the last choice or letter D. I am hoping that this answer has satisfied your query and it will be able to help you in your endeavor, and if you would like, feel free to ask another question.