Thread: What is business cycle?

Hi friends..

A business cycle is identified as a sequence of four phases:

• Contraction: A slowdown in the pace of economic activity
• The lower turning point of a business cycle, where a contraction turns into an expansion
• Expansion: A speedup in the pace of economic activity
• Peak: The upper turning of a business cycle

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Business cycle is periodic but irregular up and down movement in economic activity. Business cycle is depends on economic activities. It helps in measuring fluctuation in GDP.

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Originally Posted by joymorrison1

Business cycle is periodic but irregular up and down movement in economic activity. Business cycle is depends on economic activities. It helps in measuring fluctuation in GDP.

A business cycle is basically a way of describing the series of economic ups and downs that are part of the experience of every business that operates over a lot of years. Every company goes through a business cycle in the coursework of the coursework of its operation and continued existence.

The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. At one time, business cycles were thought to be extremely regular, with predictable durations, but today they are widely believed to be irregular, varying in frequency, magnitude and duration.

Business cycles are usually measured by considering the growth rate ofrealgross domestic product. Despite being termedcycles, these fluctuations in economic activity do not follow a mechanical or predictable periodic pattern.