ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economic recovery is the business cycle stage following a recession that is characterized by a sustained period of improving business activity. Normally, during an economic recovery, gross domestic product (GDP) grows, incomes rise, and unemployment falls as the economy rebounds.

Detailed explanation-2: -A trough is marked by conditions like higher unemployment, layoffs, declining business sales and earnings, and lower credit availability. After the trough, recovery and expansion begin.

Detailed explanation-3: -Recovery. After the trough, the economy moves to the stage of recovery. In this phase, there is a turnaround in the economy, and it begins to recover from the negative growth rate. Demand starts to pick up due to low prices and, consequently, supply begins to increase.

Detailed explanation-4: -The highest point of the economy, before the recession begins, is called the peak; conversely, the lowest point of a recession, before a recovery begins, is called the trough. Thus, a recession lasts from peak to trough, and an economic upswing runs from trough to peak.

Detailed explanation-5: -The NBER defines a recession as a period between a peak and a trough in the business cycle where there is a significant decline in economic activity spread across the economy that can last from a few months to more than a year.