6. Recently, the costs of steel, oil and other materials have increased, driving the average per-unit production cost of output up from $7 to $8. At the same time, businesses have been increasing the average per-unit price of the output that they sell from $9 to $11. Total output has grown from 2 trillion units to 2.2 trillion units.

a. At what point in the business cycle are we? Briefly explain why.

b. What types of assets are best to invest in assuming that this phase of the cycle will continue for a while?