The point where the business cycle, at its highest point, levels off and begins to fall is called

• A. Peak
• B. Trough
• C. Recession
• D. Expansion

Answer: (C)

The key idea is identifying the turning point of the business cycle. The cycle goes through four phases: expansion, peak, contraction, and trough. The moment at which economic activity has risen to its highest level and then starts to level off and fall is the peak. It marks the transition from expansion to contraction. A recession is the broader period of economic decline that follows the peak, typically defined by a sustained drop in activity over time (often discussed as consecutive quarters of negative growth). In real estate terms, the peak is the point after which demand and prices begin to soften as the economy moves into contraction. So the term for that high point is peak.