Question

Name the four phases of the Business Cycle and briefly describe the economic conditions associated with each of the phases.

Answer 1

There are four phases of business cycle and they are expansion, peak, contarction and trough. When the expansion is in the place the economy is growing and there is fall in the unemployment, the unemployment level fall backs to the natural level. The second stage is peak in the economy reaches at its maximaum and starts to contarct. The third is the contaction, in this stage the peak ends and the the economy starts to weaken the GDP fallls, the unemployment level rise. If the growth of the economy in this period is negative and we call that a recession. The next stage is the trough, the fourth phase it when the economy hits the bottom