CA Foundation · Business Economics · Business Cycles
Which of the following is the commonly used measure for dating and gauging the severity of a recession in an economy?
Real GDP movement over successive quarters is the usual measure for dating and judging a recession, because it captures changes in total output adjusted for prices. A sustained decline, often two consecutive quarters, signals a recession. Exchange rates, company registrations and repo rate do not measure aggregate output directly.
- AMovement in real GDP over successive quartersCorrect
- BMovement in the nominal exchange rate alone
- CThe number of new companies registered in a month
- DThe level of the repo rate
Explanation
Business cycle phases are tracked mainly through real output; a recession is commonly identified by a sustained decline in real GDP, often two consecutive quarters. Exchange rate, company registrations and the repo rate are not direct measures of aggregate output.
Did you get it right without looking?
One question tells you little. A timed set on Business Cycles shows your real accuracy, how long you take and where you lose marks.
More Business Cycles questions
- Which of the following is an example of an automatic stabiliser that works to reduce the severity of business cycle fluctuations without any…
- A sharp fall in demand for automobiles in India is soon followed by reduced orders for steel, tyres, glass and auto components, and then low…
- Consider these statements on the features of business cycles. (i) Business cycles are international in character, as a recession in a major …
- Which of the following is a typical effect of a business cycle expansion on the banking sector?
- Which of the following is a recognised characteristic of business cycles as described in the Business Economics syllabus?
- A statistician measures the business cycle by taking the time between two successive peaks of real GDP. What does this measure give?