The four parts of the business cycle occur in the following order
A) recession, trough, peak, expansion.
B) expansion, trough, peak, recession.
C) recession, trough, expansion, peak.
D) expansion, trough, recession, peak.
Question 2
The price of a good rises by 12 percent and the price elasticity of demand for the good is 0.85. Which of the following is a CORRECT interpretation of these facts?
A) When the price rises by 12 percent, the quantity demanded decreased by 0.85 percent.
B) For each 1 percent that the price rose, the quantity demanded decreased by 10.2 percent.
C) For each 0.85 percent that the price rose, the quantity demanded decreased by 1 percent.
D) For each 1 percent that the price rose, the quantity demanded decreased by 0.85 percent.
