Question

You read an article in a news magazine that explains how the economy expanded for several years, and then went into a period of contraction. What is the main subject of this article?
a. poverty
b. microeconomics
c. the business cycle
d. voluntary exchange

Answer 1

The correct answer is letter C. The main subject of the article in the news magazine has something to do with the business cycle. Contraction talks about the business cycle phase following the decline of the economy. Often, this happens, when the country has experienced declines in GDP for two or more consecutive quarters.