ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A recession is the period between a peak of economic activity and its subsequent trough, or lowest point. Between trough and peak, the economy is in an expansion.

Detailed explanation-2: -5. Trough. In the depression stage, the economy’s growth rate becomes negative. There is further decline until the prices of factors, as well as the demand and supply of goods and services, contract to reach their lowest point. The economy eventually reaches the trough.

Detailed explanation-3: -A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.

Detailed explanation-4: -Economic recovery is the process of reallocating resources and workers from failed businesses and investments to new jobs and uses after a recession. An economic recovery follows after the recession and leads into a new expansionary business cycle phase.