In the accompanying diagram, the phases of the business cycle from points A to D are
A) peak, recession, expansion, trough, respectively.
B) trough, recovery, expansion, peak, respectively.
C) expansion, recession, trough, peak, respectively.
D) peak, recession, trough, expansion, respectively.

Question

In the accompanying diagram, the phases of the business cycle from points A to D are
A) peak, recession, expansion, trough, respectively. 
B) trough, recovery, expansion, peak, respectively. 
C) expansion, recession, trough, peak, respectively. 
D) peak, recession, trough, expansion, respectively.

Quizplus · Accepted Answer

Point A represents the peak of the business cycle, followed by point B which is the start of a recession. Point C is where the economy hits its trough or lowest point, and point D is where the economy begins its expansion phase. Therefore, the correct order is peak, recession, trough, expansion, which is option D.

In the Accompanying Diagram, the Phases of the Business Cycle