The Trough of a Contraction Is

question 342

Multiple Choice

The trough of a contraction is

• A) the point in time at which the level of national business activity reaches a minimum before expanding again.
• B) the point in time at which the level of national business activity reaches a maximum before contracting again.
• C) the rate at which the level of business activity is declining.
• D) an external shock that causes economic activity to decline.

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Definitions:

Opportunity Cost

Surrendering the potential for benefits from different routes when opting for a specific path.

Production Possibilities Frontier

A chart illustrating the maximum production potential for two or more items, considering a specific amount of inputs.

Positive Statement

An objective and fact-based statement or claim that describes how the world actually is, as opposed to what it should be, often used in economic analysis.

Normative Statement

A value judgment that expresses an opinion or belief about what ought to be, rather than statements of fact.