Which of the following statements about the business cycle is false? A) Toward the end of a recession, financial stocks typically increase in value as investment and borrowing activities accelerate. B) Once the economy hits a trough and begins to recover, consumer durable stocks become attractive investments. C) Once the economy has recovered and current levels of consumption are sustainable, businesses may consider modernizing or expanding, thus stocks of capital goods industries become attractive investments. D) As the business cycle reaches a peak, inflation rates decrease. E) None of the above (that is, all are true statements)

Question

Quizplus · Accepted Answer

As the business cycle reaches a peak, inflation rates typically increase due to increased demand for goods and services, which can lead to a rise in prices. Therefore, statement D is false.

Which of the Following Statements About the Business Cycle Is