The Business Cycle

Read this article for a concise definition with examples of the four phases of an economic business cycle: expansion, peak, contraction, and trough.

The Business Cycle

The term "business cycle" (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade, and general economic activity. From a conceptual perspective, the business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend.

Business cycle diagram

Figure 1. Business Cycles: The phases of a business cycle follow a wave-like pattern over time with regard to GDP, with expansion leading to a peak and then followed by contraction.


Source: Linda Williams and Lumen Learning, https://courses.lumenlearning.com/atd-baycollege-introbusiness/chapter/reading-the-business-cycle-definition-and-phases/
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