Consider an economy in which existing capital is being used at a high degree,shortages in labour and goods markets are developing,and costs are rising.Which of the following terms best describes this stage of the business cycle?
A)trough
B)recovery
C)peak
D)recession
E)slump

Question

Quizplus · Accepted Answer

This stage of the business cycle is known as a peak. At this stage, the economy has reached its maximum level of growth and output, and shortages in labour and goods markets are leading to rising costs. This is often accompanied by high levels of inflation and interest rates, and can be a signal that a recession is coming.

Consider an Economy in Which Existing Capital Is Being Used