Question

What is the economic life cycle?

Answer 1

It is the economic fluctuation between the Growth and the recession

• Growthg means period of expansion
• Recession means period of contraction

There are 4 stages in the economic cycle

• Expansion
• peek
• contraction
• trough

Expansion

• Experences rapid growth of economy
• The decrease in intrest frates
• High end productions

Peek

• Growth will hit the output at its peek(maximum)
• Creates imbalances in economy

Contraction

• It corrects the imbalance problem in peek phase
• Reduces the growth
• Reduced employement

Trough

• Low economy
• Reduces growth to minimum
• Starts recovery

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