Legal Environment in Business: India
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Legal Environment in Business: India

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@HarmoniousVeena

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Questions and Answers

What primarily causes changes in the business cycle?

  • External factors like calamities
  • Interest rates (correct)
  • Increased consumer spending
  • Fluctuations in effective demand

    • How do businesses contribute to an economic expansion?

  • By reducing the level of consumer spending
  • By keeping interest rates high
  • By cutting back on manufacturing
  • By boosting the overall supply through expanding production (correct)

    • What is one effect of increased interest rates on borrowing?

  • Only firms are less likely to borrow
  • Decreased likelihood of borrowing for both firms and consumers (correct)
  • Increased likelihood of borrowing for both firms and consumers
  • No impact on borrowing behavior

    • How does a decrease in consumer expectations affect the economy?

    <p>Reduces consumer spending and slows the economy</p> Signup and view all the answers

    What causes a downward spiral in an economy according to the text?

    <p>Fall in aggregate demand</p> Signup and view all the answers

    How do high investments impact the business cycle?

    <p>Result in conditions of expansion and boom</p> Signup and view all the answers

    Signup and view all the answers

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