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What is the first stage in a business cycle?

The first stage in every business cycle is the expansion phase. Expansion begins when there is a visible increase in positive economic indicators such as employment, demand, and supply of goods and services, wages, profits, personal income, national income, and output. Economic expansion is a period of relative growth in a nation's economy.

What is the duration of a business cycle?

The duration of a business cycle is the amount of time it takes to complete all five stages: 1. Expansion A business cycle always starts with the expansion stage. During this stage, there are clear positive economic indicators, including growth in income, employment, demand, supply and profit.

What is the contraction stage of a business cycle?

The contraction phase follows the peak stage. The business cycle's contraction stage results from businesses decreasing and regulating from the previous peak. During this stage, business owners focus on finding ways to improve their financial situation, such as how they can save money or become more competitive.

What are the alternating phases of the business cycle?

The alternating phases of the business cycle are expansions and contractions (also called recessions). Recessions often start at the peak of the business cycle—when an expansion ends—and end at the trough of the business cycle, when the next expansion begins.

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