The two key phases of the business cycle are:
A) trend and random variation.
B) inflation and recession.
C) contraction and expansion.
D) inflation and deflation.

Question

Quizplus · Accepted Answer

The two key phases of the business cycle are contraction, which is a period of economic decline marked by falling real GDP, rising unemployment, and declining business profits, and expansion, which is a period of economic growth marked by rising real GDP, falling unemployment, and increasing business profits. Inflation and deflation are generally considered to be outcomes or symptoms of these larger phases, rather than distinct phases themselves. Trend and random variation are not phases of the business cycle, but rather concepts used in statistical analysis.

The Two Key Phases of the Business Cycle Are