Final answer:
The economic activity within the business cycle moves from a period of expansion to a peak, followed by a recession until it reaches a trough. After reaching the trough, the economy expands again. The correct transition in the cycle is described as expansion to a peak, then recession to a trough (Option A).
Step-by-step explanation:
Economic activity within the business cycle experiences various phases, including expansion and contraction. The transition from an expansion phase to the contraction is marked by a peak. The economy then moves into a period of recession, which lasts until it reaches the lowest point, referred to as the trough. After reaching the trough, the economy begins to recover and embarks on a period of expansion until it achieves a new peak, completing the cycle. Therefore, the correct answer to the question is Economic activity moves from a period of expansion to a peak, then moves into a period of recession until it reaches a trough (Option A).
Looking at the patterns of recessions and expansions in the U.S. economy since 1900, it's clear that the economy undergoes this cyclical pattern. These periods of expansion and contraction define the upswing and downswing in economic activity. The National Bureau of Economic Research (NBER) officially determines the dates for these peaks and troughs in the United States. Understanding these phases is crucial for economic forecasting and for government programs that react to economic changes such as TANF, SNAP, and Medicaid, which often see increased enrollment during recessions and reduced usage during expansions. This pattern of the business cycle reflects the underlying health and sustainability of economic growth.