What is the lowest point of output during a recession called?

The lowest point of output during a recession is referred to as the trough. This term specifically indicates the phase in the economic cycle where the economy has contracted to its lowest level before it begins to recover and enter a period of expansion. At the trough, economic indicators such as GDP show their lowest performance, signaling that the recession has reached its endpoint, and the economy is poised for recovery. Understanding this concept is crucial in analyzing business cycles, as recognizing when the economy hits a trough helps economists, businesses, and policymakers to anticipate upcoming recovery phases and make informed decisions.

In contrast, the peak represents the highest point of economic activity before a downturn begins, expansion refers to the period of growth following a recession, and depression describes a prolonged period of significantly diminished economic activity, much more severe than a typical recession. Each term characterizes a unique phase in the economic cycle, which can aid in understanding macroeconomic trends and movements.