15 Questions
Business cycles typically last from 2 to 10 years
True
The peak of a business cycle is the maximum point in a recession
False
A depression is a less severe form of recession
False
If an economy enters into a recession, we expect to see an increase in investment
False
Stock prices are expected to decline during a recession
True
During a recession, what is the expected impact on stock prices?
They are expected to decline due to declining profits
What is the expected impact on investment during a recession?
It declines due to expected decline in real GDP, sales, and profits
What is the defining characteristic of a depression compared to a recession?
It has a larger decline in output and employment, lasting longer
What are the two main phases of a business cycle?
Expansion (boom) and contraction (recession)
What organization is concerned with studying the business cycle and announcing whether the economy is going to enter into a recession in the USA?
NBER
What is the typical duration of a recession in the context of business cycles?
6 to 12 months
What is the defining characteristic of a depression compared to a recession?
Larger decline in output and employment
What is the maximum point in an expansion called in a business cycle?
Peak
During a recession, what is the expected impact on stock prices?
Decline due to expected decline in profits
What organization is concerned with studying the business cycle and announcing whether the economy is going to enter into a recession in the USA?
NBER
Test your knowledge about business cycles and aggregate demand with this quiz. Learn about the phases of a business cycle such as expansion and contraction, and how they affect national output, income, employment, and prices.
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