Reading 25: U.S. Inflation, Unemployment, and Business Cycles 2011, Business, business, economic, likely

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Session 6: Economics: Monetary and Fiscal Economics
Reading 25: U.S. Inflation, Unemployment, and Business Cycles

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 inflationary pressures.

B) a positive rate of economic growth.

C) increasing unemployment.

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

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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.

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