During the Past Two Quarters Real GDP Has Fallen by 1.5

Multiple Choice

During the past two quarters real GDP has fallen by 1.5 percent and the unemployment rate has increased by 1 percentage point. Economists predict that during the next quarter unemployment will rise by another percentage point. The economy is most likely:

A) at the peak of the business cycle.
B) in a recession.
C) in an expansion.
D) at the trough of the business cycle.