The Business Cycle Measures

question 104

Multiple Choice

The business cycle measures

• A) fluctuations in the long-run trend growth rate of GDP.
• B) fluctuations in the profit of businesses.
• C) fluctuations in consumption.
• D) short-run fluctuations in economic activity.
• E) fluctuations in the average tax rate paid by businesses.

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Definitions:

Equity-Financed

A method of financing in which a company raises capital through the sale of shares, rather than borrowing through debt.

Net Present Value

An evaluation of the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.

Equity-Financed

A method of raising capital through the sale of shares in a company, thereby giving investors ownership interests.

Price Per Share

The market value of a single share of a company's stock, determined by the supply and demand for it in the stock market.