In which phase of the business cycle will the economy most likely experience rising real output and
falling unemployment rates?
A. Peak
B. Recession
C. Expansion*** is my answer
D. Trough
Yes, you're right.
Your answer is correct. The phase of the business cycle in which the economy is most likely to experience rising real output and falling unemployment rates is the expansion phase.
During an expansion phase, economic activity and production of goods and services increase. This leads to rising real output or Gross Domestic Product (GDP). As businesses expand, job opportunities increase, resulting in falling unemployment rates.
To answer this question, it is important to understand the basics of the business cycle, which is the pattern of alternating periods of economic growth and contraction. The four main phases of the business cycle are peak, recession, expansion, and trough.
During the peak phase, economic activity is at its highest and real output reaches its maximum level. Unemployment rates tend to be low but may start to increase as the economy reaches its peak and begins to slow down.
A recession is characterized by a significant decline in economic activity, which leads to falling real output and rising unemployment rates. This phase is the opposite of an expansion and generally associated with economic downturns.
As mentioned earlier, the expansion phase is marked by an increase in economic activity and production, leading to rising real output and falling unemployment rates. This phase is considered to be a period of economic growth and prosperity.
The trough phase represents the bottoming out of the recession and the transition towards the next expansion. Real output and employment rates are at their lowest during this phase.
It is important to note that these phases of the business cycle can vary in length and intensity depending on various factors such as government policies, business cycles, and external events.