2
QuizMultiple Choice

The Business Cycle

Question 2 • * HSA 26-27 Economics

Which of the following conditions is most indicative of recovery?

Answer
A
The economy has stopped shrinking.
B
The economy begins to peak.
C
The GDP continues to shrink.
D
The economy is growing again.

Explanation

Recovery is the phase after a downturn when economic activity begins to rise again. Therefore, “the economy is growing again” is the clearest indication of recovery. Merely stopping the shrinkage suggests the decline has ended, but does not necessarily show that growth has started.

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