What is a peak in the business cycle?
Understand the Problem
The question is asking for the definition and explanation of the term 'peak' within the context of the business cycle, which refers to the highest point of economic activity before a downturn occurs.
Answer
The peak is the point at which economic activity reaches its highest level before entering a period of decline.
The peak is the point at which economic activity reaches its highest level before entering a period of decline.
Answer for screen readers
The peak is the point at which economic activity reaches its highest level before entering a period of decline.
More Information
The peak marks the transition between the end of an economic expansion and the start of a contraction or recession.
Tips
Common mistakes include confusing the peak with the trough, which is the lowest point in the business cycle.
Sources
- Peak: Measuring the Top of a Business Cycle - Investopedia - investopedia.com
- Business Cycle Peak: Definition & Overview - Lesson - Study.com - study.com
- The Business Cycle - Reserve Bank of Australia [PDF] - rba.gov.au
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