As the economy nears the end of an expansion, which of the following do we typically see?

Question

Quizplus · Accepted Answer

As the economy nears the end of an expansion, the Federal Reserve often raises interest rates to cool off inflationary pressures. This can lead to a slowdown in economic activity and a decrease in investment. Additionally, falling wages relative to output prices may occur as labor markets tighten and firms become more selective in their hiring. Rising firm profits and falling prices are less likely in this scenario.

As the Economy Nears the End of an Expansion, Which