Sample Multiple Choice Questions (MCQ's) for CA Foundation - Paper 4 - Business Economics and Business and Commercial Knowledge - PART 1 - BUSINESS  ECONOMICS - Chapter 5: BUSINESS CYCLE - For Practice relevant for Dec 22 and May/June 23 Examinations

Q:1 A variable that tends to move later than aggregate economic activity is called

  1. a leading variable.
  2. a coincident variable.
  3. a lagging variable.
  4. a cyclical variable.

Answer: 3

Q:2 During recession, the unemployment rate _____________ and output __________. 

  1. Rises; falls
  2. Rises, rises
  3. Falls; rises
  4. Falls; falls

Answer: 1

Q:3 Which of the following is not a characteristic of business cycles? 

  1. Business cycles have serious consequences on the well-being of the society.
  2. Business cycles occur periodically, although they do not exhibit the same regularity
  3. Business cycles have uniform characteristics and causes.
  4. Business cycles are contagious and unpredictable.

Answer: 3

Q:4 Which of the following is not an example of coincident indicator? 

  1. Industrial production
  2. Inflation
  3. Retail sales
  4. New orders for plant and equipment

Answer: 4

Q:5 Which of the following statements is correct? 

  1. The business cycle largely affects the agricultural sector
  2. The business cycle largely affects small employees
  3. The business cycle generally affects all sectors of economy but business sector in particular.
  4. The business cycle affects low wages workers

Answer: 3

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