What is a common feature of the trough phase?

The trough phase of an economic cycle is characterized by a significant downturn in economic activity. During this phase, one of the most notable features is low demand for goods and services. This reduction in demand typically occurs because consumers and businesses are hesitant to spend due to economic uncertainty, rising unemployment, or reduced income levels. As a result, this lack of consumer confidence leads to decreased sales and production, reflecting the overall slowdown in the economy.

Other phases of the economic cycle might display high employment, high GDP, or high prices, but the trough is specifically marked by a contraction in economic performance. Thus, low demand becomes a defining characteristic, as it directly impacts various economic indicators, including business revenues and overall market activity.