Expansion Phase of the Business Cycle

Which of the following statements best describes the characteristics of the expansion phase of the business cycle?

1. Interest rates are rising, unemployment is low, and consumer spending is increasing.
2. Stock market values are at their lowest, businesses reduce inventories, and inflationary pressures ease.
3. Economic growth slows, corporate profits decline, and the Federal Reserve may lower interest rates.
4. GDP growth is negative for two consecutive quarters, unemployment is rising, and consumer confidence falls.