Business Cycles Result When

question 41

Multiple Choice

Business cycles result when

• A) the labor force participation rate changes.
• B) aggregate demand grows faster than potential GDP.
• C) real GDP equals potential GDP.
• D) aggregate supply and aggregate demand change at an uneven pace.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and contribute to profits.

Gross Margin

The financial metric representing the difference between revenue and the cost of goods sold, divided by revenue, often expressed as a percentage. It indicates how efficiently a company is using its resources to produce goods.

Contribution Margin

Contribution margin is the revenue remaining after deducting variable costs, used to cover fixed costs and profit.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.