BusinessCyces

MCQs cycle s referred

to
busness
termbusiness cycle refers
and downs in
to
The lowest polnt in the
he
up
the productionof commodtes
) the uctuatinglevels of economic activity overa
s the
periodoftime (0) Erpansion.
in economic
(b) Boom.
perlodoftlme
actvities over prolonged (c) Peak.
() Trough.
Increasing unemployment rate and dminishing interest, demand for redit
rateofsavings
10. Even with lower rate of
decines in
Mhendoes an economic expanslon 0ccur in the (a) Expansion Phase
usinesscycle?
(b) Peak
peak of the business cyde (c) Contraction Phase
) Afthe
thetrough of the business cycde (0) Depresion
0) AL and trough
Atween the peak
Bebveen the trough and peak statements is true?
11. Which of the following
Ihoreasing Prosperty and High standards of Ilving (a) AnEconomy grows endlessly
endlessly
characteristicsof (b) An Economy Contractsturning points of Business
re the (ts easy to predict
(a)Peak ycle
D) Contraction (d) None of the above
(c) Expansion
is not corret?
(d) Trough 12. Which of the following statement
(a) Business Cycles are periodical
.he end of expansion is termed as (b) Business Cycdes are regular
(a) Peak (c) Business Cycdes vary in intensity
D)Contraction (d) Business Cycles vary in length
(c) Trough
(0) None of the above 13. Aleading indicator is
(a) avariable that tends to move along with the
( The beginning of recession is levelof economic activity
(a) Peak (b) a variable that tends to move in advance of
(b) Trough aggregate economic activity
(c) Contraction (c) avariable that tends to move consequent on the
(0) Expansion level of aggregate economic activity
(d) None of the above
A ASignificant dedline in general economic activity
extending over a period of time is 14. A variable that tends to move later than aggregate
(a) business cycle economic activity is called
(b) contraction phase (a) a leading variable.
(c) recession (b) acoincident variable.
(d) recovery (c) a lagging variable.
(d) a cyclical variable.
1. Severe form of recession is
(a) Contraction 15. Changes in housing interest rate is a
(b) Depression (a) a leading indicator
(c) Expansion (b) acoincident indicator
(d) Peak (c) alagging indicator
(d) a cyclical indicator
B. The trough of a business cycde occurs when
hits its lowest point. 16. Unemployment is a
(a) inflation in the economy (a) a leading indicator
(b) the money supply (b) a coincident indicator
(9 aggregate economic activity (c) alagging indicator
(0) the
unemployment rate (d) acyclical indicator
17, GDP is a
(a) a leading indicator
(b) a coincident indicator

8.9
 Padhuka's Business Economics &Business and Knowledge-For CA Foundation
(c) a lagging indicator Commercial economic
(d) acydical
indicator 25. When aggregate activity is
said to be in
economy is
18, Industriesycdethatarearethe extremely (a) Contraction.
business
(a) sensitive to the (b) an expansion.
(b) Durable goods and service sectors.
(c) a trough.
Non-durable goods (d) aturing point.
(c) Capital goods and and service sectors.
(d) Capital non-durable
goods and durable goods
goods sectors. 26. Peaks and troughs
of the business cyde
are kno 33.
19. Aderease in sectors. collectively as
(a) Volatility.
(a) the government spending would cause (b) Turning points.
right.aggregate demand curve to shift to the (c) Equilibrium points.
events.
(b) the (d) Real business cycde
(c) a aggregate demand curve to shift to the left.
movement
aggregate down and to the right along
demand curve. the
27. The most probable outoome of an increase
(d) a money supply is
movement up and to the
aggregate demand curve. left along the (a) interest rates to rise, investment
20. Which of the
rise, and aggregate demand to rise
(b) interest rates to rise, investment
spending
expansion? following does not occur during an
(a) Consumer
fll, and aggregate demand to fall s pending
b
(C) interest rates to fall, investment spending t
to increase.purchases of all types of goods tend rise, and aggregate demand to rise
(d) interestrates to fall, investment
(b) Employment
rises. increases as demand for labour and aggregate demand to fall spending to fa
(c) Business profits and business
confidence tend to Which of the following is not a
increase
(d) None of the above.
28.
business cycles
a) Business cycles have serious
characterisic o
21. Which of the the well being of the society. Consequences on
business yde? following best describes a typical (b) Business cycles occur periodically,
do not exhibit the same regularity. although they
(a) Economic
expansions are followed by economic
Contractions. (c) Business cycdes have uniform characteristics
(b) Inflation is causes.
followed by rising income and (d) Business cycles are
contagious and
unemployment. unpredictable.
(c) Economic expansions are
followed by economic
growth and development. 29. Economic recession shares all of these dharacterisie
(d) Stagflation is followed by
growth. inflationary economic except.
(a) Fall in the levels of investment, employment
(b) Incomes of wage and interest earmers gradul
22. During recession, the unemployment rate decline resulting in decreased demand for ooot
and output and services
(a) Rises; falls (c) Investor confidence is adversely affected and
(b) Rises; rises new investments may not be forthcoming
(c) Falls; rises (d) Increase in the price of inputs due to increased
() Falls; falls demand for inputs
23. The four phases of the business cycle are 30. The diferent phases of a business cyce
(a) peak, recession, trough, and boom (a) Do not have the same length and severity
(b) peak, depression, trough, and boom (b) expansion phase always last more than ten
(c) peak, recession, trough, and recovery years
(d) peak, depression,, bust, and boom (c) last many years and are difficult to get overin
short periods
24. Leading economic indicators (d) None of the above
(a) are used to forecast probable shifts in economic
policies 31. Which of the following is not an example
(b) are generally used to forecast economic coincident indicator?
fluctuations (a) Industrial production
(c) are indicators of stock prices existing in an (b) inflation
economy (c) Retail sales
(d) are indicators of probable recession and (d) New orders for plant and equipment
depression
8.10
 BusinessCycles
ACCording to
dueto onset of investments?
(a) Hawtrey
(b) ADAM Smith innovations. trade cycles ocCur 34. What is the cause
a) New inventions
for rise in
ic) JM Keynes (b) Profit expectations the economy
) Schumpeter interest rate in
(<) Low
(d) All of the above
13, According to Keynes, Fluctinuations Cycleinclude
activity are due to Cause for Business
(a) aggregate
(b) Price
fluctuatdemand
effective ions in
economic
35. Internal
(a) Money Supply
(b) Wars
(c) Supply of (c) Weather Cycles
id) None of theresources
abOve (d) Changing Technology

3 4 5 6 78
ANSWERS to MCOs
C 18 19 20
Cb 10 11 12 13 14 15 16 17
b b d
b C C
21 2223C 24
b
25 26 27 28 29 30 31 32
b 33 34 35
cdaddd d