ECONOMICS
BUSINESS CYCLES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Peak
|
|
|
Trough
|
|
|
Slump
|
|
|
Recession
|
|
|
Shock
|
Detailed explanation-1: -5. Trough. In the depression stage, the economy’s growth rate becomes negative.
Detailed explanation-2: -The downward slope of the business cycle is called economic contraction. A contraction is a period when economic output declines. During this phase, the economy is producing fewer goods and services than it did before.
Detailed explanation-3: -Recessions often start at the peak of the business cycle-when an expansion ends-and end at the trough of the business cycle, when the next expansion begins.
Detailed explanation-4: -Key Takeaways The business cycle goes through four major phases: expansion, peak, contraction, and trough. All economies go through this cycle, though the length and intensity of each phase varies.
Detailed explanation-5: -During the contraction phase of the business cycle, real GDP is decreasing.