Question

Inflation is low but the unemployment rate is the highest seen in several years. Economists report signs that the economy is beginning to improve. The economy is likely in
recession.


expansion.


a peak.


a trough.

Answer 1

The correct answer is D. A trough

Explanation:

In economics, a trough occurs after recession or contraction, and before expansion. Due to this, a trough is characterized by low inflation (slow increase in price) that leads to a low Gross Domestic Product (GDP) because due to recession the market value of products and services is low. Besides this, in trough unemployment is high due to the economic recession. However, after this stage, economic conditions improve which means inflation, less unemployment, and an increase in the GDP.

The stage described shows a trough because it is predicted the economy will improve which occurs in a trough as after this expansion begins, also, high unemployment and low inflations are part of this stage.