Question

During the expansion phase of the business​ cycle,

A) production,​
B) employment,
C) income
▼ increase decrease do not change .
During the recession phase of the business​ cycle,
A) production,​
B) employment,
C) income
▼ increase decrease do not change .

Answer 1

The answers are:

During the expansion phase of the business​ cycle:

A) production INCREASES

B) employment INCREASES

C) income INCREASES

During the recession phase of the business cycle:

A) production DECREASES

B) employment DECREASES

C) income DECREASES

Step-by-step explanation:

In the expansion phase of the business cycle, the economy is growing, inflation is under control (around 2%), unemployment is falling and the stock market is rising. At the end of the expansion phase, the economy keeps growing but at an slower rate, inflation may rise and unemployment starts to increase.

Then the business cycle gets to its peak and eventually will fall back into a recession phase (or contraction phase). The GDP contracts (negative growth) and unemployment rises to higher levels.