Which of the Following Is True About Recessions in the United

question 73

Multiple Choice

Which of the following is true about recessions in the United States?

• A) They are more common today than in the past.
• B) They are rarer today than in the past.
• C) They occur predictably about every two years.
• D) They occur predictably about every eight years.
• E) They are often caused by changes in government policy.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, after accounting for the expenses involved in the project.

Variable Costs

Costs that change in proportion to the level of production or sales activities, such as materials and labor.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.