Question

Which statement describes what happens in an economy during an expansion?(1 point)

Household spending declines.

Households are willing to spend saved money.

Unemployment tends to be at its lowest.

Unemployment hits a high spot.
Incorrect

Answer 1

Correct answer: Unemployment tends to be at its lowest.

Explanation: During an expansion economic output and demand rise, firms hire more workers, so unemployment falls. Household spending also generally increases (not declines), and while some households may spend saved money, the defining feature is rising employment and lower unemployment.