Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 10

Which of the following phases of a business cycle are marked by an underuse of resources?
1. The trough.
2. The peak.
3. The recovery.
4. The recession.

Answer options

• A. 1 and 3 only
• B. 1 and 4 only
• C. 2 and 3 only
• D. 2 and 4 only

Correct answer: B

Explanation

The correct answer, B (1 and 4 only), identifies the trough and recession as phases where resources are typically underused. In contrast, the peak is characterized by maximum resource utilization, while recovery indicates a rebound in resource use.