Choice "D" is correct. The peak of a business cycle marks the highest point of economic activity. At that point, firms are likely to face capacity constraints and labor shortages, which will put upward pressure on the overall price level.
Choice "c" is incorrect. Real GDP is likely to be above, not below, its potential level.
Choice "a" is incorrect. Business inventories are likely to be low, not high, and there is likely to be excess demand for labor not an excess supply of labor.
Choice "b" is incorrect. The overall price level is likely to be rising not falling.
