Question

Use this image to answer the following question. In the business cycle phase marked A, economists expect
A.) inflation to be high
B.) unemployment to be low
C.) economic growth to slow down
D.) consumer sales to increase

Answer 1

The correct answer is C:
Economic growth to slow down.

Answer 2

Answer:

C.) economic growth to slow down

Explanation:

The economic cycle is described by economic theory as the ups and downs of a country's economic situation. In times of economic success, unemployment is low, GDP is high and consumption tends to rise and cause inflation. This occurs at point B of the chart. Over time, as the economy slows, economic agents' expectations are thwarted. Entrepreneurs reduce investment, people decrease consumption and the unemployment rate increases, completing the recessive process of the economic cycle, expressed in point A. When the economy votes to expand, the cycle resumes with the increase of economic activity and such as point D.