Business cycle turning points are
A) brought about by changes in autonomous expenditures that are then subject to the multiplier effect.
B) unaffected by, and unrelated to the multiplier.
C) easy to predict.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

Business cycle turning points are usually brought about by changes in autonomous expenditures, such as changes in consumer confidence or government spending, which are then subject to the multiplier effect. This can cause a ripple effect throughout the economy, leading to changes in employment, output, and prices. The multiplier effect plays a significant role in amplifying the effects of these changes and driving the economy towards a turning point. Business cycle turning points are not easy to predict, and the multiplier effect is a key factor in making them more unpredictable. Therefore, Option A is the correct answer.

Business Cycle Turning Points Are