In general, during the business cycle, when economic activity is peaking:
A) interest rates begin to go lower
B) unemployment levels are high
C) inflation begins to edge higher
D) inflation goes down

Question

Quizplus · Accepted Answer

During the peak of the business cycle, inflation tends to edge higher as consumer demand increases and businesses have less capacity to meet the demand without raising prices. Interest rates may begin to rise in order to combat inflation, and unemployment levels may begin to drop as businesses have more demand for labor.

In General, During the Business Cycle, When Economic Activity Is