Question
Short term contractions and expansions in economic activity are called _____
Answer: Option B
Answer: (b)
The business cycle is the fluctuation in economic activity that an economy experiences over a period of time. It is basically defined in terms of periods of expansion or recession.
During expansions, the economy grows in real terms (i.e. excluding inflation), as evidenced by increases in indicators like employment, industrial production, sales and personal incomes.
During recessions, the economy contracts, as measured by decreases in the above indicators.
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Answer: (b)
The business cycle is the fluctuation in economic activity that an economy experiences over a period of time. It is basically defined in terms of periods of expansion or recession.
During expansions, the economy grows in real terms (i.e. excluding inflation), as evidenced by increases in indicators like employment, industrial production, sales and personal incomes.
During recessions, the economy contracts, as measured by decreases in the above indicators.
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