If real GDP is not changing, then total production in the economy is neither increasing nor decreasing. Peak The phase of the business cycle where real GDP is the highest level attainable, given the scarce resources available in the economy. In terms of the simplified two good economy and production possibilities discussed earlier, production of final goods is presumed to be productive and allocative efficient. The largest combination of goods is being produced with limited resources. The price level is usually relatively high during peaks.
Consumer confidence is generally high.
As firms anticipate high profit potential, incentives to invest are in place and net investment is generally positive. The phase of the business cycle where real GDP and employment are declining. The economy is operating at less than full production potential and significant cyclical unemployment exists. The duration of a recession is usually six months or more. The phase of the business cycle where real GDP is far below the production potential of the economy.