Business Cycles

20 Practice MCQs available for CA Foundation

Paper

Paper 4: Business Economics

Exam Weightage

5%

Key Topics

Phases, Features, Causes

Business Cycles describe the recurring fluctuations in economic activity — Expansion, Peak, Recession, and Trough. This chapter covers the phases, features, and causes of business cycles, along with theories explaining why economies go through regular boom-bust patterns.

Exam Strategy Tip

This is a lower-weightage chapter but easy to score. Focus on memorizing the four phases and their characteristics. Questions are usually straightforward.

Key Terms

Consignment

A specialized business arrangement where one person (Consignor) sends goods to another person (Consignee) to be sold on their behalf.

Limited Liability Partnership (LLP)

A corporate business vehicle that provides the benefits of limited liability while allowing its members the flexibility of organizing their internal structure as a partnership.

Business Cycle

Fluctuations in economic activity (Expansion, Peak, Contraction, Trough).

Ledger

The principal book of accounts in which all business transactions are classified and posted under separate account heads. It is also called the 'Book of Final Entry' or the 'King of All Books'.

Balance Sheet

A statement showing the financial position of a business at a particular date, listing all assets on one side and all liabilities and capital on the other side. It is not an account but a statement.

Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuideSimple Interest vs Compound Interest: CA Foundation MathsAP vs GP: Sequences and Series for CA Foundation Maths

All 20 Questions

81
The lowest point in the business cycle is referred to as the:
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82
A leading indicator is:
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83
Which of the following is not a characteristic of business cycles?
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84
Economic recession shares all of these characteristics except:
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85
The different phases of a business cycle:
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86
Which of the following is not an example of coincident indicator?
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87
During recession, the unemployment rate ________ and output ________.
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88
The four phases of the business cycle are:
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89
China’s recent slowdown can be termed as:
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90
Fashion retailers are more sensitive to business cycles than:
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91
In which phase of the trade cycle do the prices of factors of production increase?
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92
Features of Business Cycles include:
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93
Which indicator changes after the economy has changed?
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94
The most probable outcome of an increase in the money supply is:
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95
According to trade cycle is a purely monetary phenomenon.
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96
Changes in housing interest rates are a:
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97
Which one is an external cause of business cycles?
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98
Great Depression occurred in:
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99
Schumpeter attributed business cycles to:
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100
During expansion phase, employment:
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