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Homework answers / question archive / In the expansion phase of a business cycle: Select one: O a
In the expansion phase of a business cycle: Select one: O a. Employment increases, but output decreases O b. The inflation rate and productive capacity decrease O c. Employment and output increase Od. The inflation rate decreases, but productive capacity increases
(c) Employment and Output increase.
During an expansion phase of a business cycle, there is a rise in aggregate demand. This spurs investment in productive capacity to meet the rising demand. This results in more employees being hired to produce more output to meet the increased aggregate demand for goods.
Therefore, option (c) is correct, and all other options are incorrect.