CA Foundation P4 · Chapter 6 · Question 1 of 15
The correct sequence of the phases of a business cycle is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Expansion, peak, contraction, trough
Explanation
Economic activity rises during expansion, reaches its highest point at the peak, declines during contraction (recession, possibly deepening into depression), and touches its lowest point at the trough, after which recovery begins.
More Business Cycles MCQs
- Q3Which of the following is generally regarded as a leading indicator of economic activity?
- Q4Industrial production, which moves at the same time as the overall economy, is an example of a:
- Q5Which of the following is a characteristic of the depression phase?
- Q6According to Keynes, business cycles are caused mainly by:
- Q7The view that the trade cycle is 'a purely monetary phenomenon' caused by expansion and contraction of bank credit is associated with: