Which of the following is always a characteristic of the contraction phase of the business cycle?
A) lower unemployment rates
B) a decline in Real GDP
C) higher inflation rates
D) a decline in GDP
E) all of the above

Question

Quizplus · Accepted Answer

The contraction phase of the business cycle is characterized by a decline in Real GDP. The other options are not always present during the contraction phase. For example, unemployment rates may not necessarily decrease during a contraction, and inflation rates may not necessarily increase. The question asks for the characteristic that is always present, and that is a decline in Real GDP.

Which of the Following Is Always a Characteristic of the Contraction