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Recurring upward and downward swings in aggregate economic activity, reflected in measures such as national output, employment and income, are best described as:
ASeasonal demand shifts
BBusiness cycles
CStructural price reforms
DLong-run trend growth
Answer & Solution
Correct answer: B. Business cycles
1. The chapter defines business cycles as the rhythmic fluctuations in aggregate economic activity an economy experiences over time.
2. These are tracked through aggregate measures like national output, employment and income.
3. The correct choice is therefore "Business cycles".
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 5 "Business Cycles", p.1_
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