Question

A complete cycle consists of a period of:

• A. Prosperity and depression
• B. Prosperity and recovery
• C. Prosperity and recession
• D. Recession and recovery

Answer 1

The correct option is C Prosperity and recession

$\Rightarrow$ A complete cycle consist of period of : $Prosperityandrecession$.

$\Rightarrow$ $Prosperityphase$ : When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as Prosperity phase.

$\Rightarrow$ $RecessionPhase$ : The turning point from prosperity to depression is termed as Recession Phase.

During a recession period, the economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits.