50 points

the inflation rate is increasing and unemployment is decreasing. the economy is likely in (5 points)

contraction
expansion
a peak
a trough

The option (A) is correct. If the inflation rate is increasing and unemployment is decreasing, it means the economy is likely in expansion.

Further Explanation:

The business cycle consists of four phases, namely, expansion, contraction, peak, and trough. Each phase is characterized by its level of business activity, employment, and gross domestic product.  

Justification for the correct and incorrect

A.

Contraction: This option is incorrect

It is one of the phases in the business cycle. During this phase gross domestic product (GDP), consumer confidence, and employment levels decrease.

B.

Expansion: This option is correct

It is one of the phases in the business cycle. It occurs when the economic cycle moves from trough to peak. During this phase, gross domestic product (GDP), consumer confidence and employment levels increase.

C.

A peak: This option is incorrect

The peak is the point when the economy reaches its maximum level of economic growth. the prices reach their highest level, and economic indicators are not signaling any growing.  

D.

A trough: This option is incorrect

It is one of the phases in the business cycle. It occurs when the economic cycle moves from contraction to recovery.

Learn more:

1. The span of control

2. The percentage of sales method

3. The sales budget

Answer details:

Grade: Senior School

Subject: Economics

Chapter: Business Cycle

Keywords: The inflation rate, unemployment, the economy, expansion, business cycle, contraction, expansion, peak, trough, business cycle, economics, growth, increasing, decreasing.

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