MTTC Social Studies 2025 – 400 Free Practice Questions to Pass the Exam

The business cycle is characterized as a sequence of booms and busts, reflecting the fluctuations in economic activity over time. These cycles consist of periods of expansion, where the economy grows, leading to increased production and lower unemployment, followed by contractions or recessions, where economic growth slows down, resulting in declining production and rising unemployment. This cyclical nature indicates that economies do not grow in a straight line; rather, they experience ups and downs due to various factors such as consumer demand, investment levels, and external economic conditions.

The other options do not accurately capture the essence of the business cycle. Describing it as a sequence of fixed economic processes overlooks the inherent variability and unpredictability of economic dynamics. Stating that it is exclusively a cycle of only expansion phases ignores the necessary downturns that are part of economic reality. Lastly, the notion of a linear progression of economic stability misrepresents the reality of economic fluctuations, as it suggests a simplistic and unrealistic view of economic activity without accounting for the inherent volatility.