Industries That Are Extremely Sensitive to the Business Cycle Are

question 28

Multiple Choice

Industries that are extremely sensitive to the business cycle are the

• A)durable goods and service sectors.
• B)nondurable goods and service sectors.
• C)capital goods and nondurable goods sectors.
• D)capital goods and durable goods sectors.

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Definitions:

Long-Run Aggregate Supply Curve

This curve shows the relationship between the overall price level and the total output produced in an economy when wages and resource prices fully adjust to changes, reflecting an economy’s maximum sustainable output level.

Potential Output

A measure of the highest level of economic output an economy can sustain over a period without increasing inflation; synonymous with potential GDP.

Negotiable

Referring to something that can be discussed or altered through negotiation, such as terms of a contract or a financial instrument.

Expansionary Gap

A situation where the total demand in an economy exceeds its potential output, leading to inflationary pressures.