Trough
Definition
The trough is the lowest point in a business cycle, representing the end of a period of economic contraction and the beginning of an expansion. It marks the bottom of a recession or depression.
Analogy
Imagine you're on a roller coaster ride. The trough is like that moment when you reach the lowest point before starting to climb back up again. It's the moment when things can only get better from there.
Related terms
Peak: The peak is the highest point in a business cycle, representing the end of an expansion and the beginning of a contraction. It marks the top of an economic boom.
Recession: A recession is a significant decline in economic activity lasting for at least six months. It is characterized by reduced production, employment, and income levels.
Depression: A depression is an extreme and prolonged recession with severe declines in economic output, high unemployment rates, and financial crises. Depressions are rare but have devastating effects on economies.
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