Industries differ in their sensitivity to the business cycle. More sensitive industries tend to be those producing
Question:
Industries differ in their sensitivity to the business cycle. More sensitive industries tend to be those producing high-priced durable goods for which the consumer has considerable discretion as to the timing of purchase. Examples are jewelry, automobiles, or consumer durables. Other sensitive industries are those that produce capital equipment for other firms. Operating leverage and financial leverage increase sensitivity to the business cycle.
SUMMARY Related Web sites for this chapter are available at www.
mhhe.com/bkm fundamental analysis exchange rate gross domestic product unemployment rate inflation budget deficit demand shock supply shock fiscal policy monetary policy business cycle peak trough cyclical industries defensive industries leading economic indicators NAICS codes degree of operating leverage sector rotation industry life cycle KEY TERMS
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