Question:
Which of the following describes the typical business cycle in the correct sequence?
(1) Expansion, growth, peak and recession
(2) Expansion, peak, recession and trough
(3) Peak, expansion, trough and recession
(4) Expansion, recovery, trough and peak
(5) Trough, peak, recession and expansion
Correct Answer:
(2)
Answer Explanation:
A business cycle starts with an expansion (growth in real GDP), reaches a peak (the highest point), goes into a recession (contraction/decline in real GDP), and bottoms out at a trough before the next expansion begins.
Topic: Macroeconomics Year: 2022
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