ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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trough, contraction, peak, recovery
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trough, expansion, peak, contraction
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peak, expansion, trough, recovery
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peak, contraction, recovery, trough
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Detailed explanation-1: -In general, the business cycle consists of four distinct phases: expansion; peak; contraction; and trough.
Detailed explanation-2: -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-3: -Prosperity Phase : Expansion or Boom or Upswing of economy. Recession Phase : from prosperity to recession (upper turning point). Depression Phase : Contraction or Downswing of economy. Recovery Phase : from depression to prosperity (lower turning Point).
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.
Detailed explanation-5: -A trough in the business cycle marks the low point in the economic cycle. It follows a period of decline after the economy hits peak productivity. Employment and output will fall for a time, and the government often steps in to stimulate a recovery.