Question

Which of the following would be most likely associated with the expansionary phase of the economic business cycle?

)
A)
unemployment rate is high
B)
inflation is at its highest level
businesses produce more and hire workers
D)
business profits are on the decline

Answer 1

I’m not exactly sure but- expansion is the phase of the business cycle where real GDP grows for two or more consecutive quarters, moving from a trough to a peak. This is typically accompanied by a rise in employment, consumer confidence, and equity markets. Expansion is also referred to as an economic recovery. Knowing this, it cannot be A where unemployment is high or B where inflation is high because inflation is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods, it shouldn’t be D because the profits wouldn’t be on a decline, so making a guess using elimination it’s most likely C businesses produce more and hire workers