The phase of the business cycle where economic activity is decreasing is called
A) an economic trough.
B) the long-run trend of gross domestic product (GDP).
C) an economic expansion.
D) an economic contraction.
E) an economic peak.

Question

Quizplus · Accepted Answer

An economic contraction refers to the phase of the business cycle where economic activity is decreasing, including a decline in GDP, employment, and income. This phase is characterized by a decrease in consumer and business spending, leading to a decrease in overall economic output.

The Phase of the Business Cycle Where Economic Activity Is