Business cycle refers to: a. a period of macroeconomic expansion followed by a period of contraction. c. a microeconomic explanation of the number of firms that enter and leave the marketplace over a five year period of time. b. the level of inventory of a business over a period of years. d. the inherit weakness of a command economy.

The answer is (a) a period of macroeconomic expansion followed by a period of contraction.

Explanation: Business cycle refers to the rise and fall in the production output of a nation. It is usually measured by rise or fall in real gross domestic product (GDP) or inflation-adjusted GDP The business cycle is similarly known as economic cycle or trade cycle.

The business cycle should be seen as synonymous to debt cycle, which is rise and fall in household and government debt or market cycle, which is measured by stock market indices.

A) a period of macroeconomic expansion followed by a period of contraction.

Explanation:

Business cycle or economic cycle refers to the fluctuations of the economy, it represents the periods of growth or expansion of the GDP, and the periods of contraction or recession of the GDP.

The four stages of the business cycle are:

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