Q16. As the economy approaches the peak phase of the cycle, profits will tend to
ID: 1213173 • Letter: Q
Question
Q16. As the economy approaches the peak phase of the cycle, profits will tend to
a. decrease because of higher sales but lower prices
b. increase because of higher sales and higher prices
c. decrease because of lower sales
d. increase because of the elasticity of demand
Q17. According to monetary theories of the business cycle, fluctuations are
a. independent of the banking system
b. more prevalent in countries with modern banking systems
c. more prevalent in agricultural countries
d. less prevalent in those countries with modern banking systems
Q18. Measuring the intensity of the business cycle requires
a. adding seasonal variations to cyclical fluctuations
b. adding seasonal variations and random fluctuations to cyclical changes
c. eliminating seasonal variations and identifiable random forces from the data
d. multiplying the trend by the cyclical fluctuations
Q19. In the pattern of the business cycle, generally
a. costs and prices move inversely
b. costs and prices move simultaneously
c. costs lead prices
d. costs lag behind prices
Q20. The long-run average change in real GDP is known as
a. the trend
b. the long-wave cycle
c. the expansion
d. fundamental growth
Explanation / Answer
16.
b. increase because of higher sales and higher prices
because it is on the way to peak that means demand is still increasing that will also taking prices higher
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