Monday, January 3, 2011

Post 16: Chapter 10 Visual

The business cylce is the recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. There are five stages of the business cycle which inlcude growth (expansion), peak, recession (contraction), trough and recovery.  Business cycles today they are widely believed to be irregular, varying in frequency, magnitude and duration.


The business cycle is the periodic but irregular up-and-down movements in economic activity, measured by fluctuations in real GDP and other macroeconomic variables.

  • Contraction: A slowdown in the pace of economic activity

  • The lower turning point of a business cycle, where a contraction turns into an expansion

  • Expansion: A speedup in the pace of economic activity

  • Peak: The upper turning of a business cycle

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