All of the following statements are true EXCEPT:
A)when changes in real GDP are positive,the economy is said to be expanding.
B)peaks in the business cycle tend to occur when the capacity-to-output is smallest.
C)troughs occur when the capacity-to-output gap is the largest.
D)two consecutive quarterly declines in GDP are generally said to be a recession.

Question

Quizplus · Accepted Answer

Peaks in the business cycle tend to occur when the capacity-to-output is highest, not smallest. This is because during this time, capacity utilization is high and output is maximized, leading to a peak in economic activity.

All of the Following Statements Are True EXCEPT