Which of the following about business cycles is true?
A) A "depression" is a recession that is mild and relatively brief.
B) The expansions and contractions of business cycles last varying lengths of time.
C) The timing of business fluctuations is regular and, therefore, easily predictable.
D) During the recessionary phase of the business cycle, the rate of unemployment is generally quite low.

Question

Quizplus · Accepted Answer

Business cycles are characterized by periods of expansion, contraction, peak, and trough. The length of each stage varies, which means that the timing and length of business cycles are not regular or easily predictable. A depression is actually a severe and prolonged recession, so option A is incorrect. Option C is also incorrect because, as stated, the timing of business fluctuations is not predictable. Finally, during the recessionary phase, the rate of unemployment is generally high, not low, so option D is also incorrect.

Which of the Following About Business Cycles Is True