In a Typical Business Cycle, the Peak Is Immediately Followed

question 73

Multiple Choice

In a typical business cycle, the peak is immediately followed by the:

• A) recession.
• B) trough.
• C) expansion.
• D) depression.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and economic variables are in balance, with no external pressures forcing change.

Demand Decreases

A situation where the quantity of a product or service that consumers are willing to buy at a given price drops, often due to changes in preferences, income, or substitutes.

Industry Exit

The process or act of businesses leaving a particular market or industry, often due to unfavorable conditions or better opportunities elsewhere.

Long-Run Equilibrium

A state in a market where all factors of production are fully utilized, leading to a situation where supply equals demand, with no external pressures to change.