CA Foundation · Business Economics · Business Cycles

Which feature distinguishes business cycles from seasonal variations in economic activity?

Business cycles are economy-wide fluctuations that last longer than a year and vary in length and intensity, whereas seasonal variations recur within a year at predictable times. Cycles are therefore not strictly periodic, while seasonal patterns are, which is the key distinguishing feature.

1. ABusiness cycles affect only one industry, while seasonal variations affect the whole economy
2. BBusiness cycles occur within a single calendar year with a fixed length, while seasonal variations are irregular in length
3. CBusiness cycles involve fluctuations across many sectors over periods longer than a year and are not strictly periodic, while seasonal variations repeat within a year at fixed timesCorrect
4. DBusiness cycles are always caused by government policy, while seasonal variations are caused by weather