The Defining Feature of Business Cycles Is That They Are

question 25

Multiple Choice

The defining feature of business cycles is that they are

• A) changes in the trend component of real GDP.
• B) fluctuations about trend in real GDP.
• C) fluctuations about trend in the unemployment rate.
• D) fluctuations about trend in the level of employment.
• E) fluctuations about trend in standards of living.

---

Definitions:

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess the relative value of the currencies.

Corn Price

The market value at which corn, a major agricultural commodity, is traded.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Quantitative Easing

A monetary policy used by central banks to increase the money supply by buying government securities or other securities from the market.