The Expansion Phase of a Business Cycle Is Best Described

question 2

Multiple Choice

The expansion phase of a business cycle is best described as:

• A) the time elapsed from a trough to a peak.
• B) the time elapsed from a peak to a trough.
• C) the time elapsed from a peak to a peak.
• D) the time elapsed from a trough to a trough.
• E) the time spent producing above the long-run trend of GDP.

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Definitions:

Inventory Quantity

The amount of merchandise, raw materials, work-in-progress, and finished goods that a company holds at any given point in time.

Days' Sales

A financial metric that calculates the average time it takes for a company to convert its inventory into sales.

Inventory

The total amount of goods, raw materials, and finished products that a business has on hand at any given time.

Overstated Inventory

A situation where the book value of inventory is recorded higher than its actual physical count or market value, potentially misleading financial statements.