What Is the Trough in the Business Cycle? What Is the Trough in the Business Cycle? How Does a Trough in the Business Cycle Work? A trough in the business cycle is a period of negative GDP growth that marks the lowest point in an economic cycle. It signals that a recession is underway.
What is a trough in economics?
A trough, in economic terms, can refer to a stage in the business cycle where activity is bottoming, or where prices are bottoming, before a rise. The business cycle is the upward and downward movement of gross domestic product (GDP) and consists of recessions and expansions that end in peaks and troughs.
What is the difference between trough and peak?
The main differences between trough and peak are as follows: It is the lowest point of the business cycle. Peak is the highest point in a business cycle. This phase lies in a negative aspect and reflects the declining phase of an economic or business cycle. It showcases the outright positive growth and booming economy and market activities.
