What Is the Business Cycle? Different Stages of Business Cycle

What Is the Business Cycle? Different Stages of Business Cycle

The business cycle is one type of economic activity. And the cycle is consisting of different stages which are the cycle of fluctuation in GDP (Gross domestic product). And it is the sequences of the economy that is typically characterized by different sections such as recession, recovery, growth, and decline. The business cycle may vary that is based on economic activity. The duration of the business cycle is two to twelve years of range.

Business Cycle

And it is almost six years of the length.. These are some of the individual chances to make the business analysis good. Still, the business cycle plays the most important role among other note. And also it maintains greater priority as well.

Now, economics is important in every field, and it depends upon the investment spending also. Therefore the business cycle helps you lot in all possible ways. Each phase of the cycle comes under the various phase of the cycle. Overall this is one of the economic indicators that allow you to make a better business economic analysis.

Different Stages ofthe Business Cycle

The business cycles are longer-term growth rates. And the business cycle is having some basic stages such as

  • Expansion

It is the first stage of the business cycle. This helps to enhance the positive economic growth such as employment, income, output, wages, profit, the supply of goods and services, etc. using the stage and it increases the velocity of the money.Then the investment is also automatically high in the stage. This process continues fora long time for better economic conditions.

  • Peak

The peak is the second stage. The peak is the pointed the economy saturation point to reach the peak. And the maximum limit of growth is most attained. The price range is the peak andthe economy grows and is higher automatically in the peak. And it restructures the budget at the peak point.

  • Recession

The recession is another stage of the business cycle. The demand for goods and services starts rapidly in the recession stage. The stage creates a better situation of excess supply. The economic indicators in the stage such as wages, output, etc.

  • Depression

These are one of the stages of the business cycle. The evolution in the economy continues to decline and also it falls the below steady growth line. This stage is called depression.

  • Trough

This is next to the depression stage and the economic growth in the stage becomes negative. And this comes under the price of the factor. Otherwise, it demands and supply of goods and services. Then it reaches the lowest point as well. The economy perfectly reaches trough.The stage is the negative point of the economy.

  • recovery

It is the last stage of the business cycle. This stage comes to the recovery benefit. The economy develops a positive attitude in investment and employment.

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