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Assuming the economy is currently in an expansion, which phase will follow? Then place the remaining phases of the business cycle in order = Peak = Expansion

Assuming the economy is currently in an expansion, which phase will follow? Then place the remaining phases of the business cycle in order = Peak = Expansion

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Understanding the Business Cycle Phases** Assuming the economy is currently in an expansion, what phase will follow? Then, place the remaining phases of the business cycle in order. 1. **Peak** 2. **Expansion** 3. **Contraction** 4. **Trough** These options represent the four phases of the business cycle. Typically, the cycle follows this order: - **Expansion**: A period of economic growth marked by an increase in GDP, employment, and investment. - **Peak**: The pinnacle of economic growth before a downturn, where growth rates start to decline. - **Contraction**: A phase where the economy begins to slow down, leading to a decrease in GDP, employment, and production, possibly resulting in a recession. - **Trough**: The lowest point of the cycle, where the economy hits its bottom before beginning to recover. **Educational Note**: Understanding the business cycle is crucial for anticipating economic conditions and making informed decisions in fields like finance, investment, and policy-making.
Transcribed Image Text:**Understanding the Business Cycle Phases** Assuming the economy is currently in an expansion, what phase will follow? Then, place the remaining phases of the business cycle in order. 1. **Peak** 2. **Expansion** 3. **Contraction** 4. **Trough** These options represent the four phases of the business cycle. Typically, the cycle follows this order: - **Expansion**: A period of economic growth marked by an increase in GDP, employment, and investment. - **Peak**: The pinnacle of economic growth before a downturn, where growth rates start to decline. - **Contraction**: A phase where the economy begins to slow down, leading to a decrease in GDP, employment, and production, possibly resulting in a recession. - **Trough**: The lowest point of the cycle, where the economy hits its bottom before beginning to recover. **Educational Note**: Understanding the business cycle is crucial for anticipating economic conditions and making informed decisions in fields like finance, investment, and policy-making.
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