The industries or sectors of the economy in which business cycle ﬂuctuations tend to affect output most are
A) military goods and capital goods.
B) services and nondurable consumer goods.
C) clothing and education.
D) capital goods and durable consumer goods.

Question

Quizplus · Accepted Answer

Capital goods and durable consumer goods are the products that businesses tend to invest in to increase their long-term capacity for production. Therefore, the demand for these goods tends to fluctuate more noticeably throughout the business cycle. When the economy is expanding, businesses invest more in capital goods and consumers are more likely to purchase durable goods, leading to increased output. Conversely, during recessions or contractions, demand for these goods tends to decrease, leading to reduced output.

The Industries or Sectors of the Economy in Which Business