During the Past Two Quarters Real GDP Has Fallen by 1.5

question 28

Multiple Choice

During the past two quarters real GDP has fallen by 1.5 percent and the unemployment rate has increased by 1 percentage point. Economists predict that during the next quarter unemployment will rise by another percentage point. The economy is most likely:

• A) at the peak of the business cycle.
• B) in a recession.
• C) in an expansion.
• D) at the trough of the business cycle.

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Definitions:

Percentage of Net Sales

A financial ratio that represents certain expenses, liabilities, or profits as a percentage of the net sales, used to analyze the financial health and performance of a business.

Bad Debts

Amounts owed to a company that are considered uncollectible, typically due to the debtor's inability to pay.

Factoring Commissions

Factoring commissions are fees paid to a factor, or financial intermediary, for advancing funds to a business by purchasing its accounts receivable.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.