Answer:
Contraction:
Explanation:
The contraction period is the time between the peak (highest growth rate) and the trough ( the lowest growth rate). At contraction, the GDP value declines from its peak to the lowest or negative growth rate. Contraction means a shrink in economic activities.
During contraction, the unemployment rate rising as employers lay-off workers due to reduced demand. Incomes and profits decline, and the GDP value decreases to low or negative values. The contraction period starts with a recession, which is a decline in GDP value for two consecutive quarters.
