Author Question: What is a business cycle? Describe the different phases of a business cycle in a changing ... (Read 183 times)

urbanoutfitters · **on:** Jul 14, 2018

What is a business cycle? Describe the different phases of a business cycle in a changing economy.

Question 2

Arguments for the government imposing restrictions on foreign trade include
A) the loss of jobs in foreign countries.
B) advancing technology will harm the country's economy.
C) restriction of consumers' choices.
D) protection of the health of its citizens.
E) helping the foreign country become more competitive.

brittanywood · **Reply #1 on:** Jul 14, 2018

Answer to Question 1

The business cycle is the periodic expansion and contraction of economic activity that occurs in a nation's economy over a period of years. One key phase of the business cycle is contraction: a period of economic downturn marked by rising unemployment, businesses cutting back on production, and consumers shifting their buying patterns to more basic products and fewer luxuries. The other key phase of the business cycle is expansion: a period of robust, economic growth marked by businesses expanding to capitalize on emerging opportunities; consumers purchase more products which leads to more production that in turn creates more jobs. The bottom of a contraction in a business cycle is called a trough, while the high point of an expansion is called a peak. If a contraction results in a decline in GDP for at least two consecutive quarters, the downturn is classified as a recession. A depression is an extremely severe and long-lasting recession. Depressions are rare; the last full-blown depression in the United States occurred in the 1930s.

Answer to Question 2

D