What is an appropriate definition for business cycles?
a. Business cycles reflect the flow of money between businesses, individuals, and the government.
b. Business cycles are recurring, regular, and systematic movements in nominal economic activity around a long term trend.
c. Business cycles are recurring, regular, and systematic movements in real economic activity around a long term trend.
d. Business cycles are recurring, irregular, and unsystematic movements in real economic activity around a long term trend.
e. None of the above.
.D
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The profit maximizing condition for a firm in monopolistic competition is to produce so that
A) marginal cost equals marginal revenue. B) marginal cost equals price. C) average total cost equals price. D) price equals marginal revenue.
Consider a firm that needs one day to hire more labor, one week to increase its purchases of raw materials, and three months to change the amount of its capital. This firm's long run is
a. three months b. one week c. one day d. three months plus eight days e. three months plus one week