The two phases of the business cycle are
A) high economic growth and low economic growth
B) expansion and contraction
C) expansion and depression
D) high inflation and low inflation
E) potential economic growth and actual economic growth

Question

Quizplus · Accepted Answer

The two phases of the business cycle are expansion and contraction. Expansion refers to a period when the economy is growing, businesses are expanding, and there is an increase in employment and consumer spending. Contraction, on the other hand, refers to a period when the economy is slowing down, businesses are contracting, and there is a decrease in employment and consumer spending. These two phases alternate over time as the economy experiences periods of growth and decline.

The Two Phases of the Business Cycle Are