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Industries that are most adversely affected by business cycles are the _____
- a)Durable goods and services sector
- b)Non-durable goods and services
- c)Capital goods and Non-durable goods sectors
- d)Capital goods and durable goods sectors
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Industries that are most adversely affected by business cycles are the...
Industries that are most adversely affected by business cycles are the Capital goods and durable goods sectors.
Explanation:
Business cycles are fluctuations in economic activity that an economy experiences over time. These cycles go through phases of expansion, peak, contraction, and trough. During the expansion phase, businesses experience growth and profitability, while during the contraction phase, businesses experience a decline in sales and profitability. The industries that are most adversely affected by business cycles are the capital goods and durable goods sectors.
Capital goods sector:
- The capital goods sector includes industries that produce machinery, equipment, and tools used in the production of other goods and services.
- During the expansion phase, businesses invest in new machinery and equipment to increase their production capacity and efficiency.
- During the contraction phase, businesses cut back on their investment in new machinery and equipment, leading to a decline in sales for the capital goods sector.
Durable goods sector:
- The durable goods sector includes industries that produce goods that have a long lifespan, such as automobiles, appliances, and furniture.
- During the expansion phase, consumers have more disposable income to spend on durable goods, leading to an increase in sales for the durable goods sector.
- During the contraction phase, consumers cut back on their spending, leading to a decline in sales for the durable goods sector.
In summary, the capital goods and durable goods sectors are most adversely affected by business cycles because they are highly dependent on investment and consumer spending, respectively.
Explanation:
Business cycles are fluctuations in economic activity that an economy experiences over time. These cycles go through phases of expansion, peak, contraction, and trough. During the expansion phase, businesses experience growth and profitability, while during the contraction phase, businesses experience a decline in sales and profitability. The industries that are most adversely affected by business cycles are the capital goods and durable goods sectors.
Capital goods sector:
- The capital goods sector includes industries that produce machinery, equipment, and tools used in the production of other goods and services.
- During the expansion phase, businesses invest in new machinery and equipment to increase their production capacity and efficiency.
- During the contraction phase, businesses cut back on their investment in new machinery and equipment, leading to a decline in sales for the capital goods sector.
Durable goods sector:
- The durable goods sector includes industries that produce goods that have a long lifespan, such as automobiles, appliances, and furniture.
- During the expansion phase, consumers have more disposable income to spend on durable goods, leading to an increase in sales for the durable goods sector.
- During the contraction phase, consumers cut back on their spending, leading to a decline in sales for the durable goods sector.
In summary, the capital goods and durable goods sectors are most adversely affected by business cycles because they are highly dependent on investment and consumer spending, respectively.
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Community Answer
Industries that are most adversely affected by business cycles are the...
Capital and durable goods will have more impact on business cycle as their production and usage Will exist more in the market which have more demand and supply ... consumption is Made more on these goods so it effects the business cycle
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Industries that are most adversely affected by business cycles are the _____a)Durable goods and services sectorb)Non-durable goods and servicesc)Capital goods and Non-durable goods sectorsd)Capital goods and durable goods sectorsCorrect answer is option 'D'. Can you explain this answer?
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