Question

Following U.S. involvement in the Korean War and the related period of low unemployment and rising prices, the Federal Reserve intervened to curb growth and decrease inflation. At what point in the business cycle did the Federal Reserve take action?

Contraction

Expansion

Peak

Trough

Answer 1

Trough.

Step-by-step explanation:

In the Business Cycle, the trough phase happens after the contraction and before the expansion. That point of the cycle marks the end of the decline that starts in the Contraction phase after the Peak.

The Federal Reserve takes action at this point of the business cycle to stop it and move towards the Expansion phase that is when employment levels, business activity, and gross domestic product resurge.

I hope this answer helps you.

Answer 2

The correct answer among all the other choices is "Expansion." This is the point in the business cycle wherein the Federal Reserve take action. Thank you for posting your question. I hope this answer helped you. Let me know if you need more help.