Expansion/Peak is a phase characterized by which condition?

Expansion/Peak is a phase characterized by which condition?

• A. High unemployment
• B. Falling production
• C. High production and low unemployment
• D. High inflation with low growth

Answer: (C)

Expansion is the period when the economy is growing, production is rising, and more people are employed as demand for goods and services strengthens. At the peak of expansion, the economy is producing at a high level and unemployment is low, though inflation pressures may start to build as resources become tighter. So, the condition that best fits expansion (including its peak) is high production and low unemployment. High unemployment would signal a downturn, not expansion. Falling production points to contraction. High inflation with low growth describes stagflation, which is not what expansion is about.

Expansion is the period when the economy is growing, production is rising, and more people are employed as demand for goods and services strengthens. At the peak of expansion, the economy is producing at a high level and unemployment is low, though inflation pressures may start to build as resources become tighter. So, the condition that best fits expansion (including its peak) is high production and low unemployment.

High unemployment would signal a downturn, not expansion. Falling production points to contraction. High inflation with low growth describes stagflation, which is not what expansion is about.