When the economy swings back toward the boom part of a business cycle:

Question

Quizplus · Accepted Answer

When the economy swings back toward the boom part of a business cycle, all three options are true. Labor demand will increase as firms expand production to meet consumer demand, leading to a decrease in cyclical unemployment. As labor demand increases, actual wages will gradually approach the market-clearing level, ensuring that the labor market is functioning efficiently. Therefore, option D is the correct answer.

When the Economy Swings Back Toward the Boom Part of a Business