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The trough of the business cycle: a) comes right after the expansion phase

Business Dec 23, 2020

The trough of the business cycle:

a) comes right after the expansion phase.

b) comes before the recession phase.

c) occurs when the actual rate of unemployment in the economy is zero.

d) is the point where a recession ends and an expansion begins.

Expert Solution

The correct answer is d.

The trough is the business cycle (d) is the point where a recession ends, and an expansion begins.

The trough is an economic business cycle phase in which the business marks as the lowest point at which the business activities are bottoming before a rise begins. The phase occurs immediately after a contractionary phase or a recession. During the recession, the unemployment rates increase rapidly since business activities and production levels are declining. During the trough phase, the unemployment rates start to decline or bottom out at a slow rate. The trough is mostly considered the stage that marks the end of an economic recession and the start of a new expansion phase, hence indicating a positive turning point in the business cycle.

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