rach phase of the business cycle has certain characteristics. During peak or prosperity, businesses expandend employment is high. Creditors lend money freely; wages, consumer spending, and prices rise.Contraction begins when production begins to slow some because most people who want a good haveaiready purchased the good. As the business cycle moves downward a recession might occur. During arecession, businesses readjust to reduced demand, unemployment rises, consumer spending and prices fall,and creditors restrict loans. If the recession continues or worsens, it becomes a depression. The lowest pointof a depression is called a trough. Eventually, technology, government programs, international developments,or low depression prices cause an increase in demand. As business adjusts and begins to expand again, thecycle moves upward through a recovery or expansion phase-back to peak or prosperity.Identify the phase of the business cycle described in each statement below.Band"1. Stores continue to place large orders to keep up with growing demand.2. Business surpluses accumulate because consumer demand has fallen off.3. Depression prices lead to increased demand for certain goods and services..4. Consumers begin to cut back on spending for luxuries such as entertainment.5. There is a boom in vacation real estate investments.6. Car dealers lower prices and offer rebates to attract customers.7. A large number of major corporations and banks go out of business.8. New high tech businesses begin hiring many of the unemployed.9. The number of banks loaning money to prospective homeowners reaches anall-time high.10. Stock prices plummet and unemployment is widespread.Crthe

The fluctuation in the economic activities over a period of time is known as the business cycle.…

and employment is high. Creditors lend money freely; wages, consumer spending, and prices rise. ach phase of the business cycle has certain characteristics. During peak or prosperity, businesses expar Contraction begins when production begins to slow some because most people who want a good have aiready purchased the good. As the business cycle moves downward a recession might occur. During a ecession, businesses readjust to reduced demand, unemployment rises, consumer spending and prices fall nd creditors restrict loans. If the recession continues or worsens, it becomes a depression. The lowest point f a depression is called a trough. Eventually, technology, government programs, international developments, low depression prices cause an increase in demand. As business adjusts and begins to expand again, the cle moves upward through a recovery or expansion phase-back to peak or prosperity. entify the phase of the business cycle described in each statement below. "1. Stores continue to place large orders to keep up with growing demand. 2. Business surpluses accumulate because consumer demand has fallen off. 3. Depression prices lead to increased demand for certain goods and services.. 4. Consumers begin to cut back on spending for luxuries such as entertainment. 5. There is a boom in vacation real estate investments. 6. Car dealers lower prices and offer rebates to attract customers. 7. A large number of major corporations and banks go out of business. 8. New high tech businesses begin hiring many of the unemployed. 9. The number of banks loaning money to prospective homeowners reaches an all-time high. 10. Stock prices plummet and unemployment is widespread.

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter13: Measuring The Economy's Performance

Section: Chapter Questions

Problem 2AA