Answer the following with the correct business cycle phase. The four phases are expansion, peak, contraction, and trough. Look the information up online.

1. We have full employment (everyone who wants a job, has a job)

1. Consumers start to cut back on their spending.

1. The GDP level starts dropping.

contraction

1. Businesses are starting to lay off workers.

1. Consumer spending is at its highest point.

1. The GDP level begins growing.

expansion

1. Businesses are beginning to hire back laid off workers.

1. Consumers have severely cut back on their spending for the last six months.

1. The GDP level reaches its highest point.

1. The unemployment claims are the highest at this portion of the cycle.

1. Consumers, after severely cutting back on their spending, begin to loosen up and start buying more.

1. Car sales are beginning to improve.

expansion

1. Building permits for new houses has begun to slow.

1. Bankruptcy filings have hit an all-new high just prior to them beginning to decline.