AP Macroeconomics › How to find economic growth
In order, the four phases of the business cycle are:
expansion, peak, contraction, and trough
expansion, contraction, peak, and trough
contraction, expansion, peak, and trough
peak, contraction, expansion, and trough
The four phases of the business cycle are expansion, peak, contraction, and trough. Real GDP growth is positive during an expansion, followed by a point at which real GDP growth peaks, then begins to decline during a contraction, and finally a bottoming out at the point of the trough. Each of the other answer choices represents a distortion of this order.