Assuming that inflation is low, high buying power characterizes the ____ stage of the business cycle.
A) prosperity
B) depression
C) recovery
D) succession
E) recession

Question

Quizplus · Accepted Answer

In the prosperity stage of the business cycle, the economy is growing and unemployment is low. This leads to high consumer confidence and spending, which results in high demand for goods and services. When inflation is low during this stage, it means that prices are not rising too quickly, so consumers are able to maintain their purchasing power. Therefore, high buying power characterizes the prosperity stage of the business cycle.

Assuming That Inflation Is Low, High Buying Power Characterizes the ____