Question:
The sequence of phases of the business cycle are
(1) contraction, expansion, trough and peak.
(2) contraction, peak, expansion and trough.
(3) contraction, trough, peak and expansion.
(4) contraction, trough, expansion and peak.
(5) contraction, peak, trough and expansion.
Correct Answer:
(4)
Answer Explanation:
A business cycle follows a specific chronological wave pattern: An economy shrinks (Contraction/Recession) until it hits its lowest point (Trough), then it recovers and grows (Expansion/Recovery) until it hits its highest maximum point (Peak) before contracting again.
Topic: Macroeconomics Year: 2017
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