In the expansion or boom phase of the business cycle, each of the following generally occurs except
A) real GDP grows faster than trend.
B) the investment spending share of real GDP increases.
C) unemployment increases.
D) inflation increases.

Question

Quizplus · Accepted Answer

During the expansion or boom phase of the business cycle, the economy experiences growth, leading to increased investment, higher real GDP growth than the trend, and rising inflation. Unemployment typically decreases in this phase, not increases, making option C the exception.

In the Expansion or Boom Phase of the Business Cycle