ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Peak: During the expansion phase, the GDP spikes to its highest level; this is considered the economy’s peak. At this point, economic factors. read more like income, consumer spending, and employment level remain constant.

Detailed explanation-2: -The GDP is highest when the economy is at a peak. The GDP is second-highest in the expansion phase as this is the growing period where the economy tries to reach its peak. The recession comes third in the order because, during a recession, the GDP starts declining and becomes very low.

Detailed explanation-3: -The peak is the month in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity. Similarly, a month is designated as a trough when economic activity reaches a low point and begins to rise again for a sustained period.

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 business cycle is a series of expansions and contractions in real GDP. The cycle begins at a peak and continues through a recession, a trough, and an expansion. A new cycle begins at the next peak. Here, the first peak occurs at time t 1, the trough at time t 2, and the next peak at time t 3.