What is business cycle in economics?

... (Show more) business cycle, periodic fluctuations in the general rate of economic activity, as measured by the levels of employment, prices, and production. Figure 1, for example, shows changes in wholesale prices in four Western industrialized countries over the period from 1790 to 1940.

What is economic cycle & why is it important?

An economic cycle, also known as a business cycle, refers to economic fluctuations between periods of expansion and contraction. Factors such as gross domestic product (GDP) , interest rates, total employment, and consumer spending can help determine the current economic cycle stage.

What is a cyclical economic cycle?

An economic cycle is the overall state of the economy as it goes through four stages in a cyclical pattern: expansion, peak, contraction, and trough. Factors such as GDP, interest rates, total employment, and consumer spending can help determine the current stage of the economic cycle.

What are the four phases of a business cycle?

Throughout its life, a business cycle goes through four identifiable phases: expansion, peak, contraction, and trough. Expansion: Expansion, considered the "normal" — or at least, the most desirable — state of the economy, is an up period.