Business cycles areA. alternating periods of expanding and contracting economic activity, which are usually illustrated using movements in real GDP.
B. all roughly the same in duration and severity.
C. alternating periods of smoothly expanding and contracting economic activity, which are usually illustrated using movements in nominal GDP.
D. alternating periods in which real GDP increases in an expansion to a business cycle trough and then decreases in a recession to a business cycle peak.
The answer is: A) Alternating periods of expanding and contracting economic activity, which are usually illustrated using movements in real GDP.
The stages of a business cycle (also known as economic cycle) are:
- expansion: increase in the production and prices, economic growth
- peak: economic growth hits its maximum rate
- contraction: economic growth slows down and falls (recession), unemployment rises and prices stagnate
- trough: the economy hit its lowest point and starts to grow back again through a new expansion stage
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Business, published 27.03.2023
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