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QuizMultiple Choice

Aggregate Economic Behavior and the Global Economy — Test

Question 1 • Economics

Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

Answer
A
reduced incomes
B
stagnant prices
C
ambivalence about the economy
D
high levels of production

Explanation

At the peak of the business cycle, the economy is operating near its highest level of activity. Businesses produce a large amount of goods and services, so high levels of production are characteristic of prosperity. Reduced incomes are more associated with an economic downturn.

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