Peak- the highest point of real GDP. It exhibits the greatest amount of spending and the lowest unemployment. In this phase, inflation is a problem.
Expansion- also known as the recovery phase. Real GDP is increasing as a result of spending increasing and unemployment decreasing.
Contraction/ Recession- Real GDP declines for 6 months. In this phase, unemployment increases and spending reduces.
Trough- Lowest point of GDP, includes highest unemployment and least amount of spending.
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