Question

Line graph labeled Business Cycle. Curve rises, falls, rises again, and begins to fall again. Point A marks top of first curve. Point E marks top of second curve. Point C marks bottom of curve between the two rises. B labels a black arrow spanning the fall between A and C. D labels a black arrow spanning the rise between C and E.
Public Domain

Which of the following most likely occurs during C?

High inflation and high unemployment
High production and low inflation
Low inflation and low unemployment
Low production and high unemployment

Answer 1

During point C on the business cycle, the economy is typically at a trough. The characteristics of a trough phase usually include low production levels and high unemployment. Therefore, the most likely scenario occurring during point C would be:

**Low production and high unemployment.**