alleryStart learning →What are business cycles?
AThe seasonal peaks in sales that certain industries record
BThe upward and downward changes in the level of activity
CThe stages a single product passes through in its market
DThe regular reviews of interest rates by a central bank
Answer & Solution
Correct answer: B. The upward and downward changes in the level of activity
1. The level of economic activity is constantly changing.
2. Those upward and downward changes are called business cycles.
3. Changes in gross domestic product trace the pattern as activity expands and contracts.
4. Cycles vary in length, in how far the economy moves and in how much of it is affected, so they are not the same as seasonal sales peaks or scheduled policy meetings.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.4 Macroeconomics: The Big Picture_
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