An expansion ends when the economy

Question

Quizplus · Accepted Answer

An expansion ends when the economy hits a peak and then enters a recession. A peak is the highest point in economic activity, and after that, there is a decline in output and income, leading to a recession. Therefore, option D is the best choice. A is incorrect because growth following a peak is a part of the recession phase. B is incorrect because two quarters of growth do not necessarily mean the end of an expansion. C is incorrect because a trough is the lowest point in economic activity, and it comes before an expansion, not after it.

An Expansion Ends When the Economy