CA Foundation · Business Economics · Business Cycles
In the standard description of a business cycle, the phase in which output and employment reach their lowest level and begin to stabilise before recovery is called the:
The correct answer is trough. A trough is the lowest turning point of a business cycle, where output and employment are at their minimum and activity stops falling and begins to recover. A peak is the top, and a recession is the downward phase before the trough.
- APeak
- BTroughCorrect
- CBoom
- DRecession
Explanation
The trough is the turning point at the bottom of the cycle where economic activity is lowest and starts to turn upward. A peak is the opposite turning point at the top. A recession is the declining phase leading into the trough, not the lowest point itself.
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