Trade Cycle (4 steps) sequence?

• A. Boom, Recession, Depression, Recovery
• B. Boom, Depression, Recession, Recovery
• C. Boom, Recession, Recovery, Depression
• D. Boom, Recession, Depression, Recovery

Answer: (A)

The sequence tests how economies typically move through stages of growth and contractions, with the downturn deepening before activity picks up again. After an expansion or boom, activity slows and a recession begins. If the downturn continues to worsen, it can become a depression, a more severe and prolonged decline. Once conditions improve, the economy enters a recovery phase, with activity and employment rising again. So the logical order is boom, recession, depression, then recovery, reflecting increasing downturn severity before the eventual revival. The other sequences would place either a deeper downturn before a shallower one or recovery before the worst of the decline, which doesn’t fit how cycles usually unfold.