ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A peak is the highest point between the end of an economic expansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall.

Detailed explanation-2: -In the expansionary phase, the economy experiences growth over two or more consecutive quarters. Interest rates are typically lower, employment rates rise, and consumer confidence strengthens. The peak phase occurs when the economy reaches its maximum productive output, signaling the end of the expansion.

Detailed explanation-3: -Phase 1: Expansion. To increase production, businesses hire more workers or invest capital to expand their physical infrastructure and operations. Generally, corporate profits begin to rise along with stock prices. Gross domestic product (GDP) also begins rising as the economy gets its “boom” cycle underway.

Detailed explanation-4: -Key Takeaways The business cycle goes through four major phases: expansion, peak, contraction, and trough. All economies go through this cycle, though the length and intensity of each phase varies.