All but one of the following are characteristics of short-term economic fluctuations. Which is the exception?Group of answer choicesExpansions and recessions are felt throughout the economyDurable-goods industries are more sensitive to short-term fluctuations than service and non-durable industriesRecessions occur at regular and predictable intervalsUnemployment rises during recessionsNone of the above
Question
All but one of the following are characteristics of short-term economic fluctuations. Which is the exception?Group of answer choicesExpansions and recessions are felt throughout the economyDurable-goods industries are more sensitive to short-term fluctuations than service and non-durable industriesRecessions occur at regular and predictable intervalsUnemployment rises during recessionsNone of the above
Solution
The statement "Recessions occur at regular and predictable intervals" is the exception. Here's a step-by-step explanation:
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Short-term economic fluctuations, also known as business cycles, are characterized by periods of expansion (growth) and recession (contraction).
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These fluctuations are felt throughout the economy, affecting output, employment, and income in various sectors. This is why the first statement is true.
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Durable-goods industries, such as automobile and appliance manufacturers, are indeed more sensitive to short-term fluctuations than service and non-durable industries. This is because consumers can delay purchases of durable goods during economic downturns, but they still need services and non-durable goods like food and clothing. So, the second statement is also true.
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Unemployment typically rises during recessions as businesses cut back on production and lay off workers. So, the fourth statement is true as well.
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However, recessions do not occur at regular and predictable intervals. While economists can identify patterns and indicators that suggest a recession might be coming, they cannot predict exactly when it will start or how long it will last. This is why the third statement is the exception.
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Therefore, the correct answer is "Recessions occur at regular and predictable intervals".
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