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    Question

    Which of the following sequences best represents these

    business cycle phases in order?
    A Expansion → Peak → Trough → Contraction Correct Answer Incorrect Answer
    B Contraction → Trough → Expansion → Peak Correct Answer Incorrect Answer
    C Trough → Peak → Expansion → Contraction Correct Answer Incorrect Answer
    D Peak → Expansion → Trough→ Contraction Correct Answer Incorrect Answer
    E Contraction → Expansion → Trough→ Peak Correct Answer Incorrect Answer

    Solution

    The business cycle is the recurring but irregular up-and-down movement of an economy's gross domestic product. The correct chronological order of the four phases is: Expansion (growth), Peak (high point), Contraction (recession), and Trough (low point). Therefore, starting from a contraction, the order is Contraction, Trough, Expansion, Peak.

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