He Figure Given Below Represents the Business Cycle of an Economy

question 79

Multiple Choice

he figure given below represents the business cycle of an economy.
Figure 7.1

-Refer to Figure 7.1. The overall upward trend in real GDP reflected by this figure implies that:

• A) the real GDP gap is widening over time.
• B) cyclical unemployment is growing at positive rates.
• C) consumer purchasing power is rising over time.
• D) on average, labor productivity is declining.
• E) expansionary phases outweigh contractionary phases in the economy over time.

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Definitions:

Foreign Firm

A company that is incorporated under the laws of a country other than the one in which it does its main business.

Direct Quote

The value of foreign exchange quoted with the domestic currency for every unit of the overseas currency.

Reserve Currency

A foreign currency held in large amounts by governments and institutions as part of their foreign exchange reserves.

Financial Crisis

A situation where financial assets suddenly lose a large part of their nominal value, often leading to a collapse of markets and economies.