Which statement is true?

A) The entire expansion from the trough to the peak is the recovery phase.
B) The entire contraction from the peak to the trough is the recession phase.
C) Recessions never last more than one year.
D) Prosperity is the first phase of expansion.

Contraction

The downturn of the business cycle, when real GDP is declining.

Recovery Phase

A period within the economic cycle where activity rebounds following a recession, characterized by increasing GDP, employment, and investment.

Expansion

In economics, expansion refers to a phase of the business cycle where the economy grows and output increases, often characterized by rising employment and income.