Why does TCU tend to lead business cycle peaks By definition
Why does TCU tend to lead business cycle peaks? By definition, it must have the same indicator status as industrial production. O The durable goods component of industrial production is always declining near the end of an expansion, and since industrial capacity is still growing. TCU starts decreasing near the end of an expansion. O Since industrial capacity is always declining near the end of a recession, whenever TCU is increasing, output tends to be decreasing O Since industrial capacity rarely is declining near the end of a recession, whenever TCU is increasing, output tends to be increasing
Solution
B is the correct option
Reason
At the peak or when the expansion is ending. industrial capacity rises but the durable component declines, thus B will be the correct option,
