Which of the following is TRUE regarding business cycles?
I. Cycles are predictable.
II. In each cycle, a peak follows an expansion.
III. Potential GDP fluctuates around real GDP.

Question

Quizplus · Accepted Answer

Business cycles are not always predictable, as they are influenced by various factors, such as government policies, global events, and consumer behavior. However, it is generally true that a peak follows an expansion in each cycle. Potential GDP remains constant in the long run, and it is only real GDP that fluctuates.

Which of the Following Is TRUE Regarding Business Cycles