Praxis II Citizenship

Answer: B - A trough and a peak are considered turning points in the business cycle. The business cycle is composed of two phases and two turning points. A contraction phase is a period when the real gross domestic product (real GDP) decreases and unemployment increases. A trough is when the real GDP reaches its minimum or stops declining. An expansion phase is a period when the real GDP increases and unemployment decreases. And a peak is when the real GDP reaches its highest point or stops growing. The two phases can be identified when they are in progress, but the turning points can only be identified after the fact.