Graph 2 - Business Cycle

E - Expansion
P - Peak
C/R - Contraction/Recession
T- Trough

Notes

• One cycle is from trough to trough.
• The average cycle is 6 years.
• Recession lasts about 14 months.
• The bulk of a cycle is the growth stage.
• Peaks and Trough are meaningless because we never know we are in one until it's over.
• If a recession loses more than 10% of real GDP, then it is a depression.
• Trough means the end of a recession.