Business Cycles Affect Long Run Growth Because

question 7

Multiple Choice

Business cycles affect long run growth because

• A) uncertainty caused by business cycles deters investment
• B) installation costs for new plant and equipment are lower during recessions than during periods of expansion
• C) human capital depreciates during recessions
• D) the competition to survive a recession provides incentives for firms to reorganize for greater efficiency
• E) all of the above

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Definitions:

Federal Securities Regulations

Laws and regulations established at the federal level aimed at protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation.

Registration Statement

A set of documents, including a prospectus, required by regulatory authorities before a company can issue stock to the public.

Prospectus

An official document that companies must publish when offering new shares to the public, detailing the investment's risks, objectives, and financial statements.

SEC

Abbreviation for the Securities and Exchange Commission, a U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry.