Correct answer: Option D — All of the above.Evaluate every statement one by one, because the question asks for the incorrect one.
Statement 0: 'Depression is a severe form of trough' — this is correct.
A trough is the lowest turning point of the business cycle, and a deep, prolonged contraction at that point is called a depression.
Statement 1: 'Depression causes fall in interest rate' — this is correct.
In a depression, output, income, employment and prices fall, the demand for credit collapses and the central bank follows an easy money policy, so interest rates decline.
Statement 2: 'Peak is the highest point' — this is correct.
The peak (also called boom) is the topmost turning point of the business cycle, where output, employment and income reach their maximum.
Thus statements 0, 1 and 2 are all true statements about the business cycle.
Since none of the individual statements is false, the claim 'All of the above' (that all the statements given above are incorrect) is the only incorrect statement.
Hence the answer is Option D: All of the above.