Economics Four Phases Economics Business Cycle Diagram

The business cycle moves about the line.

Economics four phases economics business cycle diagram. Below this line we have two stages of the business cycle recovery in the. A boom in the upswing and a recession in the down swing. Below is a more detailed description of each stage in the business cycle.

An expansion is characterized by increasing employment economic growth and upward pressure on prices. Definition of business cycle. Fe is the full employment line.

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. The various phases of business cycle can be seen from the following diagram.

Such fluctua tions in macroeconomic variables are known. 39 1 illustrates a typical business cycle and its successive phases. They are expansion peak.

Stages each business cycle has four phases. The line of cycle that moves above the steady growth line represents the expansion phase of a business cycle. An economy is a term that describes a set of production and consumption activities that determine how resources ought to be allocated.

Stages of the economic cycle. In this stage there is an increase in positive economic indicators such as employment income output wages profits demand and supply of goods and services. The economic cycle is also known as the business cycle and it is the fluctuating state of a market based economy.