Which of the following is characteristic of a downturn in the business cycle?
A) Higher unemployment rates
B) Higher prices
C) Growth in real output
D) Increased population

Question

Quizplus · Accepted Answer

A downturn in the business cycle is usually marked by a decrease in economic activity, leading to lower demand for goods and services. This often results in companies laying off workers, which in turn leads to higher unemployment rates.

Answer: B is incorrect because a downturn in the business cycle typically leads to lower prices as demand decreases.

Answer: C is incorrect because growth in real output is indicative of an expansionary phase in the business cycle, not a downturn.

Answer: D is incorrect because an increased population may or may not be related to the business cycle, and does not necessarily indicate a downturn.

Which of the Following Is Characteristic of a Downturn in the Business