CA Foundation · Business Economics · Business Cycles
Which of the following is a recognised characteristic of business cycles as described in the Business Economics syllabus?
Business cycles are recurrent fluctuations in economic activity, but their length and severity differ from cycle to cycle. They are not perfectly regular or fixed in duration, and they spread across many sectors, mainly in industrial market economies.
- ABusiness cycles are periodic fluctuations that recur but are not of exactly the same length or intensityCorrect
- BBusiness cycles occur only in agricultural economies and never in industrial ones
- CBusiness cycles are confined to a single industry and do not spread to other sectors
- DBusiness cycles follow a fixed, perfectly predictable duration of exactly five years
Explanation
Business cycles recur, but their duration and intensity vary from one cycle to another, so they are not strictly periodic. They are also not limited to one industry, because they spread across sectors, and they are typical of industrial, market-based economies. The fixed five-year claim is therefore wrong.
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