During the Past Three Quarters Real GDP Has Fallen by 4

Multiple Choice

During the past three quarters real GDP has fallen by 4 percent and the unemployment rate has climbed from 5 to 7 percent. Economists predict that in the next quarter GDP will show a modest growth of 0.5 percent and unemployment may fall to 6.8 percent. The economy is most likely:

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