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Chapter 5 questions

For Chapter 5 Unit questions Click Price-output determination under different market forms
QUESTION
Q7) Industries that are extremely sensitive to the business cycle are the

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Correct

Solution:
The answer is (d) Capital goods and durable goods sectors.
Industries that are extremely sensitive to the business cycle are those that experience large fluctuations in demand as the economy moves through the different phases of the business cycle.
Capital goods and durable goods sectors are particularly sensitive to the business cycle because they produce goods that are typically expensive and long-lasting, such as machinery, equipment, and automobiles.
These goods are often purchased using credit, and demand for them is sensitive to changes in interest rates, consumer confidence, and overall economic growth.

Correct option is (d)