A contraction is a phase of the business cycle where a country's real gross domestic product (GDP) has declined for two or more consecutive quarters.
 | | Contraction | | Contraction, in economics, refers to a phase of the business cycle in which the economy as a whole is in decline. A contraction generally occurs after the business cycle peaks, but before it becomes a trough. According to most economists, when a country's real gross domestic product (GDP)—the most-watched indicator of economic contraction—has declined for two or more consecutive quarters, then a contraction has occurred. | | Read More » | | Business Cycle | | The business cycle describes the rise and fall in production output of goods and services in an economy. | | Read More » | | | Depression | | Depression is a severe and prolonged downturn in economic activity characterized by a sharp fall in employment and production. | | Read More » | | | Trough | | 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. | | Read More » | | | Economic Recovery | | An economic recovery is a business cycle stage following a recession that is characterized by a sustained period of improving business activity. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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