ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The lowest point on the business cycle is a trough, which is characterized by higher unemployment, lower availability of credit, and falling prices.

Detailed explanation-2: -Contraction occurs when there is an economic decline marked by a fall in real GDP. The trough is the lowest point in an economic contraction, when real GDP stops falling.

Detailed explanation-3: -Trough-This is the lowest turning point of the business cycle when contraction recovers itself to expansion. It starts at the end of the depression. In this period, the employment starts rising slowly.

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.

Detailed explanation-5: -A peak is the highest point of a business cycle and is followed by a contraction and eventual trough. Peaks are called after the fact once economic indicators have confirmed that contraction has set in and isn’t simply noise.