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A business cycle is a cycle of fluctuations in the gross domestic product gdp around its long term natural growth rate.
Business cycle and its phases. In the contraction phase. Given its relationship to the phases of the business cycle unemployment is but one of the various economic indicators used to measure economic activity. This phase is known as peak phase.
In peak phase the economic factors such as production profit sales and employment are higher but do not increase further. At some point gnp reaches its upper turning point and the downswing of the cycle begins. A typical business cycle has two phases ex pansion phase or upswing or peak and con traction phase or downswing or trough.
An expansion is characterized by increasing employment economic growth and upward pressure on prices. A lot of information can be gleaned from the various economic indicators and their relationship to the business cycle. It explains the expansion and contraction in economic activity that an economy experiences over time.
In other words peak phase refers to the phase in which the increase in growth rate of business cycle achieves its maximum limit. Expansion peak contraction and trough.
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