GDP Is a Good Proxy for the Business Cycle Itself

question 23

Multiple Choice

GDP is a good proxy for the business cycle itself since ________.

• A)its real consumption spending component is procyclical and coincident
• B)its real investment spending component is procyclical and coincident
• C)it typically goes up in a boom and down in a recession
• D)all of the above
• E)none of the above

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Definitions:

Firm Life

The period during which a company operates, from its inception to the point it ceases operations or is dissolved.

Ease of Formation

The simplicity with which a business or company can be legally established, often considered in the context of different types of business entities like corporations, partnerships, and sole proprietorships.

Treasurer

An executive role in a company or organization responsible for managing the institution's finances, including investments, capital structure, and liquidity.

Tax Matters

Issues, policies, and regulations related to taxation and its administration.