Final answer:
Income reaches the highest level at the peak point of the business cycle. The peak marks the top of economic activity before a recession, and this concept is fundamental in understanding economic fluctuations and the different phases of the business cycle.
Step-by-step explanation:
Income reaches the highest level at the peak point of the business cycle. The business cycle represents the economic movement from peak to trough and trough to peak, including periods of recessions and expansions. The peak is the high point before a recession begins, and the trough is the low point before a recovery begins.
According to historical data, the three longest trough-to-peak expansions occurred since 1960. The most recent recession, which was caused by the COVID-19 pandemic, started in February 2020 and ended in May 2020, while the previous significant economic downturn was the Great Recession, lasting about 18 months starting in December 2007.
A recession lasts from the peak to the trough while an economic upswing runs from the trough to the peak. The most prolonged expansion recorded started in June 2009 and ended with the COVID-19 pandemic-induced recession, lasting 128 months.