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Chapter 5 questions

For Chapter 5 Unit questions Click Price-output determination under different market forms
QUESTION
Q12) The four phases of the business cycle are

Correct

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Solution:
(a) expansion, peak, contraction and trough.

The business cycle is a pattern of fluctuations in economic activity characterized by four main phases:
expansion, peak, contraction, and trough. During the expansion phase, the economy is growing, employment is increasing, and production is rising.
The peak phase marks the end of the expansion and the beginning of the contraction.
During the contraction phase, economic activity slows down, employment and production start to decline.
The trough phase is the bottom of the business cycle, and it marks the end of the contraction and the beginning of the expansion.
Correct option is (a)