Identifying Economic Phases through Indicators

Medium Economic Analysis Business Cycle Analysis

Maria is a portfolio manager for a large investment firm. She is currently reviewing economic indicators to assess the potential impact on her clients' portfolios. As part of her analysis, she identifies a sustained increase in consumer confidence, an upward trend in industrial output, and a consistent rise in employment figures. Based on this information, Maria is trying to classify the current state of the economy within the business cycle.

Which of the following best describes the economic phase that Maria is observing?

The economy is in a recession phase, characterized by declining output and rising unemployment.

The economy is in an expansion phase, marked by increasing consumer confidence, output, and employment.

The economy is in a contraction phase, where economic activity is slowing down after a period of growth.

Hint

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% Correct59%