The figure given below represents the business cycle of an economy.?Figure 7.1

-Refer to Figure 7.1. The movement from point A to point B in the figure is most likely to be associated with _____.
A) negative inflation.
B) an increase in the aggregate demand for goods and services.
C) lagging economic productivity.
D) an increase in cyclical unemployment.
E) a downward trend in leading economic indicators.

Question

The figure given below represents the business cycle of an economy.?Figure 7.1
 
-Refer to Figure 7.1. The movement from point A to point B in the figure is most likely to be associated with _____.
A) negative inflation. 
B) an increase in the aggregate demand for goods and services. 
C) lagging economic productivity. 
D) an increase in cyclical unemployment. 
E) a downward trend in leading economic indicators.

Quizplus · Accepted Answer

The movement from point A to point B in the business cycle is associated with an increase in the aggregate demand for goods and services. This is because during this phase, the economy is experiencing an expansionary phase, where there is an increase in economic growth, employment, and consumer spending. As a result, businesses experience an increase in demand for their goods and services, leading to an increase in aggregate demand.

The Figure Given Below Represents the Business Cycle of an Economy.?Figure