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Chapter 10: Problem 3

In the three-phase business cycle, the prosperity phase is always followed immediately by _____. (LO1) a) recovery b) the trough c) 5 percent d) impossible to find

Short Answer

Expert verified
b) the trough

Step by step solution

01

Identify the Three Phases of the Business Cycle

The three phases of the business cycle are Recovery (or Expansion), Prosperity (or Peak), and Recession (or Contraction). Understanding these phases and their sequence will help us find the phase that comes immediately after the prosperity phase.
02

Determine the Phase After Prosperity

With the knowledge of the sequence of phases in the three-phase business cycle, we can determine that after the prosperity (peak) phase, the next phase is the recession (contraction) phase.
03

Match the Answer with the Given Choices

Now that we know that the recession phase follows the prosperity phase, we can match our answer to the available choices to see which one is correct: a) recovery b) the trough c) 5 percent d) impossible to find In this case, none of the answer choices directly mention "recession," but the closest option is "b) the trough," as the trough represents the lowest point in the business cycle, which occurs during the recession phase of the cycle. Therefore, the correct answer is: b) the trough

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Most popular questions from this chapter

Which is the most accurate statement? (LO3) a) Business cycle forecasting dates back to biblical times. b) Business cycle forecasts are nearly always inaccurate. c) Business cycle forecasts are almost always accurate. d) It is virtually impossible to forecast business cycle turning points.

In recent years, which one of the following has tended to push up our natural unemployment rate? (LO5) a) Our increasing disability roles b) The quadrupling of our prison population c) The rapid growth of the temporary-help industry d) Growing worker insecurity e) The entry of millions of teenagers into the labor force

During the Great Depression most unemployment was _____. a) 100 percent b) 200 percent c) 300 percent d) 400 percent e) 500 percent

According to the Book of Genesis, Joseph may have been the first person to _____. a) forecast a business cycle b) collect unemployment insurance benefits c) formulate the misery index d) differentiate between demand-pull inflation and cost-push inflation

Which would be the most accurate statement? (LO7) a) Most business owners prefer deflation to inflation. b) In recent years Japan has suffered from deflation. c) Deflation is very likely in the United States over the next few years. d) Deflation is a form of disinflation.
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