Question

Which of the following reflects a “boom” phase in a capitalist economy?

Demand is high, supply is high, and employment is low.
Production increases and spending on goods is low.
Employment, profits, and incomes are low.
Employment, profits, and incomes are high.

Answer 1

The answer is:

Employment, profits, and incomes are high.

When the boom phase in capitalist economy happens money flows, and a lot of trading is made, the supply and offer meet and the incomes and profits grow, this way employment also grows, in the ideal world this would continue to happen.

Answer 2

"Employment, profits, and incomes are high" would reflect a “boom” phase in a capitalist economy, since this is when people are spending and consuming more, leading to an increase in GDP.