ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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expansion, peak, trough, contraction
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peak, contraction, trough, expansion
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contraction, expansion, trough, peak
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trough, expansion, contraction, peak
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Detailed explanation-1: -Answer and Explanation: The correct answer is C. peak; recession; trough; recovery. The economic cycle fluctuates between periods of expansion (growth) and contraction (economic decline).
Detailed explanation-2: -An economic cycle, which is also referred to as a business cycle, has four stages: expansion, peak, contraction, and trough.
Detailed explanation-3: -Recovery. After the trough, the economy moves to the stage of recovery. In this phase, there is a turnaround in the economy, and it begins to recover from the negative growth rate. Demand starts to pick up due to low prices and, consequently, supply begins to increase.
Detailed explanation-4: -A peak is the highest point of a business cycle and is followed by a contraction and eventual trough. Peaks are called after the fact once economic indicators have confirmed that contraction has set in and isn’t simply noise. Peak to peak business cycles have been lasting longer on average for the U.S. economy.