Business cycles in macroeconomics are
A) the increase in a nation's productive capacity over a long period of time.
B) the economic interrelationships among nations.
C) changes in the average standard of living over time.
D) short-run ups and downs in aggregate economic activity.
E) profits and losses of firms.

Question

Quizplus · Accepted Answer

Business cycles refer to the short-run fluctuations in aggregate economic activity, such as changes in output, employment, and prices. These cycles are typically characterized by periods of expansion (increases in economic activity) and contraction (decreases in economic activity). This is distinct from long-term trends in a nation's productive capacity or changes in the average standard of living over time. The other answer choices, such as economic interrelationships among nations or profits and losses of firms, do not directly relate to business cycles.

Business Cycles in Macroeconomics Are