- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 2. Understanding Business Cycles
- Subject 3. Economic Indicators over the Business Cycle
CFA Practice Question
Which statement is TRUE?
A. When an economy goes into recovery stage, businesses start the hiring process.
B. When an economy is in slowdown stage, unemployment rate start to rise.
C. Inventories have a much greater effect on economic growth than justified by their relatively small aggregate size relative to the economy as a whole.
Explanation: A is false. Business rely on overtime before moving to hiring.
B is also false. Unemployment rate will continue to fall but at slowly decreasing rates.
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