The Making the Connection gives examples of firms that prospered by expanding during recessions. As we have seen, some firms prosper by expanding during recession.
Part A: When firms expand during recessions, they
A. will lose money
B. have to borrow extra funds to finance operation until the economy recovers
C. cannot be certain when recovery will occur and know they could experience prolonged losses
D. can recover any losses when the economy recovers
Part B: A more cautious approach might be advisable in particular industries where
A. wages are high
B. sales are particularly cyclical
C. sales are particularly noncyclical
D. prices fluctuate
Answer: Part A.
C. cannot be certain when recovery will occur and know they could experience prolonged losses
Answer: Part B
B. sales are particularly cyclical