In the expansion or boom phase of the business cycle,
A) production and employment increase while the price level decreases.
B) production, unemployment, and the price level increase.
C) production, employment, and the price level increase.
D) production, employment, and the price level decrease.

Question

Quizplus · Accepted Answer

During the expansion or boom phase of the business cycle, production and employment increase as the economy grows. Typically, the price level also increases due to higher demand for goods and services, leading to inflation. This is why option C is correct.

In the Expansion or Boom Phase of the Business Cycle