Question

Pat is trying to determine which phase of the business cycle the local economy is in. There has been a long period of demand for rental property, in which prices have risen. There are some indications that the market is slowing, but demand is still strong. What is this phase of the business cycle called?

Answer 1

The phase of the business cycle that Pat is observing, where there has been a long period of demand for rental property causing prices to rise, but with some indications of slowing, is called the Expansion phase or Boom phase.

Step-by-step explanation:

The phase of the business cycle that Pat is observing, where there has been a long period of demand for rental property causing prices to rise, but with some indications of slowing, is called the Expansion phase or Boom phase.

During the Expansion phase, the economy is growing rapidly, new jobs are being created, and consumer demand is high. This leads to increased demand for rental property and higher rental prices. However, as the market begins to slow down, it may be an indication that the economy is approaching the peak of the business cycle.

It is important to note that the business cycle is not a predictable or mechanical pattern, but rather a general representation of the fluctuations in economic activity over time.