The Business Cycle

question 30

Multiple Choice

The business cycle

• A) tends to be regular in length and amplitude.
• B) has little or no impact on the price level.
• C) is in the recession phase when national output is rising to its potential level.
• D) has higher rates of unemployment at the trough than at the peak.
• E) has been a rare phenomenon since World War II.

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Definitions:

Time Value

The theory that a sum of money is more valuable if it's available immediately, rather than the same amount in the future, because of its earning capabilities.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, typically expressed on an annual basis.

Present Values

This concept calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Annuity Payments

Regular fixed payments received from an investment over a specified period of time.