Business Cycle
The business cycle or economic cycle refers to the fluctuations of economic activity about its long term growth trend. The cycle involves shifts over time between periods of relatively rapid growth of output (recovery and prosperity), and periods of relative stagnation or decline (contraction or recession). These fluctuations are often measured using the real gross domestic product.
There are four main stages in a trade cycle or business cycle.
|
GDP is rising |
Boom |
Results from too much spending. |
Recession |
Results from too little spending. |
Slump |
High level of unemployment. |
