Contractions are characterized by A

Business Dec 23, 2020

Contractions are characterized by

A. increases in incomes.

B. falling prices and rising incomes.

C. falling prices and falling incomes.

D. increases in housing construction.

Expert Solution

The correct option is:

C. falling prices and falling incomes.

Contractions are reflected in terms of fall in real incomes in the economy, economic production and sales. It also leads to increase in the unemployment rates. With the fall in the price and fall in incomes; the real income of the economy would fall.

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