Contractions are characterized by
A) increases in the rate of growth of economic activity.
B) an upward movement toward a peak in economic activity.
C) a downward movement toward a trough in economic activity.
D) a long period in which no cycles are observed in economic activity.

Question

Quizplus · Accepted Answer

Contractions refer to a decline in economic activity, characterized by a downward movement toward a trough in the business cycle. A contraction is the opposite of an expansion, which is characterized by an upward movement toward a peak in economic activity. Therefore, option C is the best choice. Options A, B, and D are incorrect as they do not accurately describe contractions.

Contractions Are Characterized by