Which type of industry is considered cyclical?

• A. Health care
• B. Tobacco
• C. Supermarket
• D. Household appliances

Answer: (D)

Cyclicality means how much an industry’s sales follow the ups and downs of the broader economy. Household appliances are durable goods that people tend to buy when the economy is doing well and credit is available, and they postpone these big-ticket purchases during downturns. That tendency for demand to rise in good times and fall in recessions makes the household appliances industry cyclical.

Health care, on the other hand, is typically defensive because people need medical services regardless of the economy. Supermarkets sell essentials, so their demand stays relatively steady. Tobacco also tends to be steadier due to addiction and established consumption patterns, though it faces regulatory issues.