Which of the Following Is Correct

question 410

Multiple Choice

Which of the following is correct?

• A) Short run fluctuations in economic activity happen only in developing countries.
• B) During economic contractions most firms experience rising profits.
• C) Recessions come at irregular intervals and are easy to predict.
• D) When real GDP falls, the rate of unemployment rises.

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Definitions:

Overvalued

Refers to a situation where the market price of an asset is considered to be higher than its intrinsic value.

Capital Balances

Amounts reflected in a company's financial records that represent the owner's investment in the business.

Cash Equals

Refers to the value of assets within a company that are in liquid form and can be readily converted to cash.

Share Income

Income earned by shareholders from their investments in a company, often referred to as dividends.