The Business Cycle

The business cycle refers to the fluctuations in economic activity that an economy experiences over time. It consists of four main phases: expansion, where the economy grows and jobs increase; peak, when economic activity is at its highest; contraction, where the economy slows down, leading to job losses; and trough, the lowest point before recovery begins. This cycle repeats, influenced by factors like consumer confidence, investment, and government policies. Understanding the business cycle helps businesses and individuals make informed decisions about spending, investing, and planning for the future.