Chapter 13, Problem 8AA

To determine

To choose: The term that best completes the given sentence.

Explanation of Solution

The correct answer is ‘precede’.

Recession refers to a period of time in the cycle of business in which the country’s total output is decrease. In general, a recession happens in the economic cycle after the peaks, when it reaches trough. Expansion is the duration of the business cycle during which real GDP will rise from a low to a high for more than two successive quarters. Usually this is followed by a rise in jobs, consumer confidence and stock markets. In the business cycle the period of recession always come after expansion phase. Thus, the correct choice is ‘precede’.

Economics Concept Introduction

Introduction: The business cycle is the inevitable fall or rise in the level of output of the economy that happens over time. It is a valuable method to evaluate the economy and also helps in make financial choices easier.