Question
Use the graph showing the annual percentage change in the US gross domestic product to answer the question. Based on your knowledge of the business cycle, what began at the end of 2007? A. a peak B. a recession C. a trough D. a recovery
Answer
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Jerome
Advanced · Tutor for 1 years
Answer
To answer the question, we need to understand the different phases of the business cycle and relate them to the information provided about the US Gross Domestic Product (GDP) from the line chart.The business cycle typically consists of four phases:1. Expansion: This is a period when the economy is growing and GDP is rising.2. Peak: This is the point at which the economy has reached its maximum output, and a period of expansion ends. After the peak, the economy typically enters a contraction phase.3. Recession: This is a period of economic decline when GDP falls. It is characterized by reduced spending and investment, higher unemployment, and lower production.4. Trough: This is the lowest point of the economy before it begins to recover. After the trough, the economy enters the recovery phase.5. Recovery: This is the period after the trough when the economy starts growing again.According to the picture details, the percentage change in the US GDP dropped to -2% in 2009. This indicates that the economy was in decline in 2009, which is characteristic of a recession. Since recessions typically follow a peak, we can infer that the peak occurred before the recession. Given that the recession is noted to have occurred in 2009, the peak would have occurred just before the downturn.Therefore, based on the business cycle and the information provided, what began at the end of 2007 was:B. a recessionThe final answer is B. a recession.