Which of the following does NOT explain why the official chronology of past U.S. business cycles maintained by the National Bureau of Economic Research goes back only to 1854?
A)The further back in time you go, the fewer economic data are available.
B)There may not have been business cycles in the modern sense much before 1854.
C)Before 1854 the U.S. economy was mostly agricultural, and therefore the short-run aggregate supply curve was probably close to vertical.
D)There were no banks before 1854.

Question

Quizplus · Accepted Answer

The option (D) stating that there were no banks before 1854 is incorrect as there were banks in the U.S. before this date. The correct option is (C) which states that the U.S. economy before 1854 was mostly agricultural, and hence the short-run aggregate supply curve was probably close to vertical, which means that there were no significant fluctuations in output during that time period that could be considered as business cycles in the modern sense.

Which of the Following Does NOT Explain Why the Official