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Question 8
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Which of the following is not true of a peak within a business cycle:
OA) A downturn in the economy follows a peak.
OB) A peak is the opposite of a trough.
C) An increase in the real GDP follows a peak.
OD) After a peak, supply begins to exceed demand.



Answer :

GinnyAnswer

Final answer:

Explains the characteristics of a peak within a business cycle and clarifies misconceptions related to real GDP changes after a peak.


Explanation:

A peak within a business cycle:

  • OA) A downturn in the economy follows a peak: This statement is true. After a peak, the economy transitions into a downturn or recession phase.
  • OB) A peak is the opposite of a trough: Correct. A peak represents the highest point of economic activity, while a trough is the lowest point.
  • C) An increase in the real GDP follows a peak: This is not accurate. Real GDP actually decreases following a peak during a recession.
  • OD) After a peak, supply begins to exceed demand: This statement is generally true. During a recession following a peak, supply may indeed start surpassing demand.

Learn more about Business Cycles here:

https://brainly.com/question/31642085


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C) An increase in the real GDP follows a peak.

A peak in a business cycle represents the highest point of economic activity before a downturn. After a peak, the economy typically enters a contraction phase where real GDP decreases, not increases. Therefore, an increase in real GDP does not follow a peak.