What Happens During the Contraction Phase of the Business Cycle

question 49

Multiple Choice

What happens during the contraction phase of the business cycle?

• A) Production increases
• B) Unemployment increases
• C) Income increases
• D) Employment increases

---

Definitions:

Foreign Assembly

The practice of assembling products in a country different from where the components were manufactured, often to save labor costs or avoid import tariffs.

Licensing

involves granting a legally protected right under a trademark, patent, or copyright to use, manufacture, or sell a product.

Domestic Trade Regulations

Rules and guidelines that govern the exchange of goods and services within a country.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.