Suppose an Economy Has Historically Grown at a Rate of 2.25

Multiple Choice

Suppose an economy has historically grown at a rate of 2.25%. The economy is growing at a rate of 3%, and the unemployment rate is low by historical standards. The economy is expected to continue to grow in the near future, but monetary authorities are concerned that inflation may increase. This economy is probably in the _____ stage of the business cycle.

A) expansion
B) recovery
C) contraction
D) trough