ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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GDP is decreasing and people are losing their jobs
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GDP is increasing, businesses are expanding, and consumers are spending more.
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GDP is decreasing and businesses are selling less goods.
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None of the above
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Detailed explanation-1: -Expansion is the phase of the business cycle where real gross domestic product (GDP) grows for two or more consecutive quarters, moving from a trough to a peak. Expansion is typically accompanied by a rise in employment, consumer confidence, and equity markets and is also referred to as an economic recovery.
Detailed explanation-2: -In the expansionary phase, the economy experiences growth over two or more consecutive quarters. Interest rates are typically lower, employment rates rise, and consumer confidence strengthens. The peak phase occurs when the economy reaches its maximum productive output, signaling the end of the expansion.
Detailed explanation-3: -As the economy expands, businesses generally see an increase in sales or demand for their products. They will produce more goods and services to meet this increase in demand. As businesses need to produce more goods and services to meet demand, they need to hire more workers.
Detailed explanation-4: -During an expansion phase of the business cycle, real GDP is increasing. 1. The expansion phase is sometimes called recovery.