Reading 25: U.S. Inflation, Unemployment, and Business Cycles economic, business, Business, 2010

honeycfa

LOS f: Explain how economic growth, inflation, and unemployment affect the business cycle.

The expansion phase of a business cycle is least likely characterized by:

A) increasing unemployment.

B) increasing inflationary pressures.

C) a positive rate of economic growth.

---

Unemployment is typically decreasing during the expansion phase of a business cycle.

 

honeycfa

During an economic contraction:

A) the unemployment rate typically decreases.

B) real GDP growth is greater than its sustainable long-term rate.

C) inflationary pressures are typically decreasing.

---

An economic contraction (recession) is typically characterized by decreasing inflationary pressures, increasing unemployment, and low or negative real GDP growth.