When the economy slumps,the earnings of cyclical stocks drop;when the economy recovers,so do their earnings.

Question

Quizplus · Accepted Answer

Cyclical stocks are directly tied to the performance of the economy. When the economy is in a recession or slump, the demand for goods and services decreases, resulting in lower earnings for cyclical stocks. Conversely, when the economy is in a recovery phase, the demand for goods and services increases, leading to higher earnings for cyclical stocks. Therefore, the statement is true.

When the Economy Slumps,the Earnings of Cyclical Stocks Drop;when the Economy