Which of the following is the best description of the business cycle?
A)the normal cycle of profits and losses by producers in the economy
B)the short-run fluctuations of national income around its trend value
C)a five-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods
D)a ten-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods
E)the fluctuations of one country's national income in comparison to another country's national income

Question

Quizplus · Accepted Answer

The business cycle refers to the short-run fluctuations of national income around its trend value, which includes periods of economic growth, recession, recovery, and expansion. It reflects the overall performance of the economy and is affected by various factors such as changes in consumer spending, government policies, and international trade. Therefore, choice B is the most accurate description of the business cycle.

Which of the Following Is the Best Description of the Business