The recurring growth and decline in real GDP is the definition of a business cycle. Option A is incorrect because economic activity does not necessarily have to expand and contract equally. Option B is incorrect because the three phases are peak, recession, and recovery, not depression. Option D is incorrect because a business cycle refers to the entire economy, not just an individual business.

Solved

A Business Cycle Is

Question 9

Multiple Choice

A business cycle is:

A) the period of time in which the expansion and contraction of economic activity are equal.
B) the period of time in which there are three phases, which are: peak, depression
And recovery.
C) the recurring growth and decline in real GDP.
D) the period of time in which a business is established and ceases operations.

Correct Answer: