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Solution:
The answer is (a) Economic expansions are followed by economic contractions.
A typical business cycle is characterized by the cyclical pattern of economic growth and contraction.
The business cycle typically consists of four phases: expansion, peak, contraction, and trough.
During the expansion phase, the economy experiences an increase in economic activity, such as rising employment, production, and consumer spending.
The peak phase marks the end of the expansion and the beginning of the contraction, during which economic activity begins to slow down, and a decline in production and employment follows.
The trough phase marks the end of the contraction and the beginning of the next expansion.
Correct option is (a)