ECONOMICS (CBSE/UGC NET)

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ECONOMICS

FEDERAL RESERVE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The economy is growing ____ Sometimes starts when something “jump starts” the economy (war, corporate tax break, increased investment, government spending, war) ____ Production is increasing ____ Wages are increasing ____ Unemployment is decreasing ____ All of these describe this stage of the business cycle.
A
Peak
B
Contraction/Recession
C
Trough/Depression
D
Recovery/Expansion
Explanation: 

Detailed explanation-1: -An economic cycle is the overall state of the economy as it goes through four stages in a cyclical pattern: expansion, peak, contraction, and trough. Factors such as GDP, interest rates, total employment, and consumer spending can help determine the current stage of the economic cycle.

Detailed explanation-2: -Phases of Economic Growth Expansion – During this phase employment, income, industrial production, and sales all increase, and there is a rising real GDP. Peak – This is when an economic expansion hits its ceiling. It is in effect a turning point.

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.

Detailed explanation-4: -3. The trough is the bottom of the recession period, unemployment is at its highest, inflation is low. 4. expansion (recovery) is when output is increasing, unemployment begins to fall and later inflation begins to rise.

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