If a product is desired, someone will make it. If the products satisfy the consumer, the business will thrive. Contraction - the economy slows down. People spend less and companies cut back on the production of products. Trough - the low point of a contraction.
Mild depressions indicate a recession, while severe contractions indicate a depression .
There could be widespread unemployment and poverty. Expansion - a turnaround of the economy. Demand for products and services begins to rise. Balance of Trade - how a country is doing vs. the world economy. Balance of Trade A positive balance of trade occurs when we sell more than we buy.