After a prolonged recession, businesses are investing and consumers ar

QUESTION

After a prolonged recession, businesses are investing and consumers are spending freely again. The unemployment rate is well below the historical average and exports have increased substantially.

What term best describes this point in the business cycle?
A) peak
B) expansion
C) recovery
D) prosperity
E) trough

ANSWER

Answer: D
Explanation: D) Prosperity is the latter phase of economic expansion. The economy has completed its recovery from the trough and business is booming.