The business cycle is defined as
A)persistent growth in potential GDP.
B)changes in financial markets.
C)irregular ups and downs in production and jobs.
D)changes in the stock market.
E)the period of time during which the unemployment rate is rising.

Question

Quizplus · Accepted Answer

The business cycle refers to the up and down fluctuations in overall economic activity, including production and employment. It is characterized by periods of expansion (increasing GDP, employment, and output) and periods of contraction (decreasing GDP, employment, and output). Changes in financial markets or the stock market may be influenced by the business cycle, but are not necessarily synonymous with it. Persistent growth in potential GDP is a long-term trend rather than a cyclical movement, and the unemployment rate is only one indicator of business cycle fluctuations.

The Business Cycle Is Defined as