Which of the Following Is True of the Business Cycle

question 145

Multiple Choice

Which of the following is true of the business cycle record of the United States?

• A) Recessions have been lengthier during the last two decades than was true prior to 1980.
• B) Real GDP contracted throughout most of the 1950s.
• C) Real GDP in 2000 was approximately the same as 1950.
• D) Since 1950, the fluctuations in GDP have been less severe than before 1950.

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Definitions:

Incremental Analysis

The process of comparing the expected costs and benefits of alternative decisions, focusing on the differences between them.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Unprofitable Segment

A division or part of a company that does not generate profit and may result in a financial loss for the company.

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new factory or investing in new equipment, worthwhile.