During an expansion in the business cycle, we would expect _____.

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During a expansion phase of the business cycle, overall economic activity increases. This typically leads to more production and lower unemployment as firms hire more workers to meet higher demand.
Option 1: 'inflation to rise and unemployment to fall' aligns with the common expectations of expansion. Higher demand and greater output can put upward pressure on prices (inflation) while unemployment decreases as hiring picks up. This option matches standard macroeconomic intuition for an expanding economy.
Option 2: 'unemployment to rise and production to fall' describes a contractionary scenario, not an expansion. In expansion, unemployment tends to fall and production tends to rise, making this option inconsistent with the expansion phase.
Option 3: 'any of these potential outcomes' is incorrect because expansions do not produce all these divergent outcomes simultaneously. The characteristic pattern is rising production with falling unemployment, and often rising inflation, not the other combinations.
Option 4: 'production to rise and inflation to fall' suggests rising output but falling prices, which is atypical in an expansion. Demand-side pressures and higher utilization of resources commonly push prices up rather than down, so this option is unlikely in a typical expansion.
In summary, option 1 best reflects the expected relationship between unemployment and inflation during an expansion, while the other options describe conditions that do not fit the standard expansion narrative.

ECON 2002.01 SP2025 (25230) Quiz 2

During an expansion in the business cycle, we would expect _____.

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ECON 2002.01 SP2025 (25230) Quiz 2

During an expansion in the business cycle, we would expect _____.

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类似问题

Use the following diagram to answer the next question. The phases of the business cycle from points A to D are, respectively

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Use the diagram below to answer the following question. Based on this diagram, long-run growth is represented by ___, and short-run expansion is represented by ___.

_____________ is alternating periods of economic expansion and economic recession.

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Use the diagram below to answer the following question. Based on this diagram, long-run growth is represented by _, and short-run expansion is represented by _.