What are the phases of a business cycle?

Which of the following statements accurately describe the phases of a business cycle? Select ALL that apply.

A.) A trough occurs at the end of the contraction phase and the beginning of the expansion phase.

B.) A peak level of business activity occurs at the end of the expansion phase and the beginning of the contraction phase.

C.) A contraction phase is when an economy exhibits decreasing levels of production and consumption.

D.) A contraction phase is when an economy exhibits increasing quantities of production and spending.

An expansion period is characterized by the following attributes: businesses that are operating with ______ ( A.) Higher B.) Lower ) levels of production activity, low unemployment, ______ ( A.) Increasing B.) Decreasing ) retail sales, low or decreasing prices and interest rates, a ______ ( A. ) Declining B.) Rising ) stock market, and expectations of higher business profits.

Expansion periods tend to end with a_______ ( A.) Trough B.) Peak) , whereas contraction periods end with a _____. ( A.) Trough B.) Peak)

How do the phases of the business cycle affect your personal financial planning activities?

Think about the characteristics of the expansion and contraction periods in a business cycle. How might the characteristics of these two phases affect your efforts to manage your financial resources? Select ALL that apply.

A.) During a period of economic contraction, finding a job can generally be easier due to the decreasing unemployment rate.

B.) During the early stage of an economic expansion, it is generally easier to buy expensive assets, such as a car or home, on credit due to lower product prices and interest rates.