In the business cycle, a recovery eventually ends and real GDP reaches a A) peak

Business Dec 23, 2020

In the business cycle, a recovery eventually ends and real GDP reaches a

A) peak.

B) trough.

C) recession.

D) stable plateau.

Expert Solution

The answer is A).

The peak is the period when real output reaches the highest level, after which real output will star to decline. A recovery ends when real output starts to decline again. Hence, a recovery ends when real GDP reaches a peak.

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