Business Cycle Persistence Refers to the Property That

question 59

Multiple Choice

Business cycle persistence refers to the property that

• A) real GDP is rarely exactly at trend.
• B) booms and recessions last a long time.
• C) when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend.
• D) business cycles are persistently hard to predict.
• E) real GDP tends to stay in the peaks and troughs of the business cycle.

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Definitions:

Working Capital

Current assets minus current liabilities, indicating the liquidity available for a company's day-to-day operations.

Current Ratio

A measurement of a corporation's capability to meet obligations due in less than a year by evaluating its short-term liquid assets.

Inventory Turnover

A ratio that measures how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.

Cost of Goods Sold

The direct costs attributable to the production of the goods or services sold by a company, including material and labor expenses.