Question : The term "business cycle" refers to:
Option 1: Fluctuations in economic growth over time
Option 2: Fluctuations in inflation over time
Option 3: Fluctuations in unemployment over time
Option 4: Fluctuations in interest rates over time
Correct Answer: Fluctuations in economic growth over time
Solution : The correct answer is (a) fluctuations in economic growth over time.
The business cycle refers to the recurring pattern of expansion and contraction in economic activity within an economy. It represents the ups and downs or fluctuations in the level of economic output and activity over time.
The business cycle is driven by various factors, including changes in aggregate demand, monetary policy, fiscal policy, business investments, consumer confidence, and external shocks. It is a natural feature of market economies and is influenced by economic forces and policies.
Question : The Phillips curve shows the relationship between:
Option 1: Inflation and unemployment
Option 2: GDP and inflation
Option 3: GDP and unemployment
Option 4: Interest rates and inflation
Question : The short-run Phillips curve suggests that there is a trade-off between:
Question : A recession is characterized by:
Option 1: High inflation and high unemployment
Option 2: Low inflation and high unemployment
Option 3: High inflation and low unemployment
Option 4: Low inflation and low unemployment
Question : Stagflation is a situation characterized by:
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