Define Business Cycle In Economics

An economic cycle synonymous to the business cycle involves four stages including expansion peak contraction and trough.

Define business cycle in economics. Then the cycle repeats itself. The business cycle is the natural rise and fall of economic growth that occurs over time. Definition of business cycle.

It can also help you make better financial decisions. An expansion is characterized by increasing employment economic growth and upward pressure on prices. Typically the business cycles involves a period of rapid growth followed by slower growth or in some cases a recession.

Expansion peak contraction and trough. The business cycle is sometimes referred to as the trade cycle or just. A business cycle also called economic cycle is a period of changing economic activity comprised of expansions and contractions as measured by real gdp.

To put it simply the business cycle is defined as the real fluctuations in economic activity and gross domestic product gdp over a period of time. The cycle is a useful tool for analyzing the economy. In other words it s a period of time where the economy grows peaks shrinks and bottoms out.

The expansion phase takes place when the economy is growing steadily there are lower rates of interest more production levels and more pressure on inflation. Business cycles are comprised of concerted cyclical upswings and downswings in the broad measures of economic activity output employment income and sales. At times consumption investment employment output etc rise and at other times these macroeconomic variables fall.

A capitalistic economy experiences fluctua tions in the level of economic activity. Definition of the business cycle the business cycle refers to the cyclical nature of economic growth. Business cycles are identified as having four distinct phases.