During the trough stage of the business cycle, what typically happens to aggregate demand, unemployment, inflation, and the current account balance?

Show Answers

Declines; decreases; decreases; moves toward a surplusDeclines; increases; decreases; moves toward a surplusRemains unchanged; low; increases; moves toward a deficitIncreases; decreases; increases; moves toward a deficit

Explanation

At the trough phase, aggregate demand tends to decrease due to reduced economic activity. Consequently, unemployment and inflation both fall. Additionally, the current account balance is more likely to shift toward a surplus as imports decline and exports become relatively stronger.