Business CyclesPYQ - May 2019Question 83 of 20
All Questions

Which of the following is not a characteristic of business cycles?

Options

ABusiness cycles have serious consequences on the well-being of the society
BBusiness cycles occur periodically, although they do not exhibit the same regularity
CBusiness cycles have uniform characteristics and causes
DBusiness cycles are contagious and unpredictable
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Correct Answer

✅ Option c — Business cycles have uniform characteristics and causes

All Options:

  • ABusiness cycles have serious consequences on the well-being of the society
  • BBusiness cycles occur periodically, although they do not exhibit the same regularity
  • CBusiness cycles have uniform characteristics and causes
  • DBusiness cycles are contagious and unpredictable

Detailed Solution & Explanation

To determine the correct answer, let's analyze the characteristics of business cycles. • Business cycles refer to the fluctuations in economic activity, typically involving periods of expansion and contraction. • These cycles have significant effects on the overall well-being of society, making them a crucial area of study in business economics. • The cycles do not follow a fixed pattern and can vary in terms of duration and intensity, which means they do not occur at regular intervals. The correct answer is the option that states business cycles have uniform characteristics and causes, which is incorrect because: • Each business cycle can have unique causes, such as changes in government policies, technological advancements, or global events. • The characteristics of business cycles, including their duration and impact, can also vary significantly from one cycle to another. In contrast, options stating that business cycles have serious consequences and occur periodically, although not with the same regularity, are correct as they align with the observed patterns of business cycles in economic history.

About This Chapter: Business Cycles

Paper

Paper 4: Business Economics

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.

View Official ICAI Syllabus

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 Concepts to Understand

Business Cycle

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

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More Questions from Business Cycles

The lowest point in the business cycle is referred to as the:

Which of the following is not an example of coincident indicator?

Features of Business Cycles include:

Which one is an external cause of business cycles?

During expansion phase, employment:

Economic recession shares all of these characteristics except:

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