The trough of a contraction is
A) the point in time at which the level of national business activity reaches a minimum before expanding again.
B) the point in time at which the level of national business activity reaches a maximum before contracting again.
C) the rate at which the level of business activity is declining.
D) an external shock that causes economic activity to decline.

Question

Quizplus · Accepted Answer

The trough of a contraction is the lowest point of a business cycle, which marks the end of the declining phase and the beginning of the expansion phase. It is the point in time at which the level of national business activity reaches a minimum before expanding again. Therefore, option A is the correct answer. Option B refers to the peak of a business cycle, option C refers to the rate of change, and option D refers to external factors causing a decline in economic activity, which may or may not be a trough of a contraction.

The Trough of a Contraction Is