The Business Cycle Is Defined as

question 77

Multiple Choice

The business cycle is defined as

• A)changes in the stock market.
• B)changes in financial markets.
• C)persistent growth in potential GDP.
• D)irregular ups and downs in production and jobs.
• E)the period of time during which the unemployment rate is rising.

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Definitions:

Average Variable Cost

The variable cost (cost that changes with production volume) divided by the quantity of output produced.

Profit-maximizing

Refers to the process by which a company determines the price and output level that returns the greatest profit.

MR = MC

An economic principle stating that optimal production level is reached when marginal revenue equals marginal cost.

Marginal Cost

The cost required to produce a subsequent unit of a product or service.