Homework Help

Can you please explain the business cycle?

user profile pic

kristenmarieb... | Student, Grade 10 | Valedictorian

Posted July 17, 2013 at 3:43 AM via web

dislike 1 like

Can you please explain the business cycle?

1 Answer | Add Yours

user profile pic

Kay Morse | College Teacher | (Level 1) Senior Educator

Posted July 17, 2013 at 10:52 PM (Answer #1)

dislike 1 like

The business cycle is a concept that encompasses the economic behavior of an entire economy over extended periods of time. The business cycle is a way of measuring and explaining historic behavior of a large economic system, like the economic system of a state, a country, a continent or even the global economy. To measure and define such large economies, specific measures of economic activity are compiled and analysed on various criteria.

Thus, knowing the purpose and scope of the business cycle, we can defin the business cycle as the movement of an economy through the various economic stages of economic extremes from economic expansion to economic depression. The various stages between and including the extremes are:

  • expansion or growth
  • peak
  • recession  or contraction
  • trough
  • recovery

Once thought to be regularly occurring cycles, these are now thought to be variably occurring cycles that depend upon many factors to precipitate each phase.

Kay Morse

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes