Question

If business cycles were pure cycles, which statement holds true:

a. would have constant amplitude;
b. would have constant periodicity;
c. would be easy to forecast;
d. would have predictable trend reversals?

Answer 1

If business cycles were pure cycles, they would have a constant periodicity or frequency.

Step-by-step explanation:

If business cycles were pure cycles, the statement b. would have constant periodicity is true.

Business cycles are not pure cycles, as they do not follow a mechanical or predictable periodic pattern. However, if they were pure cycles, they would have a constant periodicity or frequency. This means that the cycles would repeat at regular intervals and maintain the same frequency over time.

For example, if the business cycle had a periodicity of 5 years, it would go through phases of expansion and contraction every 5 years, without any variation or deviation.