Industries that generally perform very well when the entire economy performs well and perform very badly when the economy performs badly are called:
A) diversified industries.
B) cyclical industries.
C) risk-free industries.
D) specific-risk industries.

Question

Quizplus · Accepted Answer

Cyclical industries are those that experience fluctuating demand based on the overall health of the economy. When the economy is doing well, consumers and businesses are more likely to spend money, which benefits cyclical industries. However, when the economy performs poorly, these industries tend to struggle as demand decreases. This is in contrast to diversified industries, which are less affected by economic fluctuations, and risk-free industries, which do not exist. Specific-risk industries may or may not be affected by economic conditions depending on the nature of their specific risks.

Industries That Generally Perform Very Well When the Entire Economy