Point a Suggests

question 40

Multiple Choice

Point A suggests:

• A)​an economy operating with an inflationary gap.
• B)​an economy operating with a recessionary gap.
• C)​an economy operating at long-run equilibrium.
• D)​There is not sufficient information to draw a conclusion.

---

Definitions:

Prosperity Phase

A stage of the business cycle in which economic activity is growing, leading to higher levels of employment, income, and production.

Recession Phase

is a period of temporary economic decline during which trade and industrial activities are reduced, typically identified by a fall in GDP in two successive quarters.

Recovery Phase

A stage in the economic cycle where activity begins to increase again after a period of recession or depression, marked by rises in employment, consumer spending, and production.

Business Cycle

The cyclic phenomenon of economic expansion and contraction experienced by an economy over time.