When you read a magazine article explaining how the economy expanded for several years and then contracted.The subject of this article was:
C....The Business Cycle.
The Business Cycle is also known as the Economic Cycle or Trade Cycle and it shows upward and downward movement of the GDP( Gross Domestic Product) along its long term growth trend.
The length of a business cycle is the period of time containing a single boom and contraction in sequence.
The four distinct phases of the business cycle are:
The correct answer is letter C. The business cycle is main subject of the article in the news magazine. Over time economy goes through a natural rise and fall of growth. Being aware of economic cycles helps to analize the economy and make better finantial decisions.
A business cycle has four stages: They are expansion, peak, contraction, and trough. They don’t occur at regular intervals .During expansion the economy is grows until it reaches its peak and begins to contract.The economy hits its bottom at the trough.
As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner. They provide specialized financial services, which reduce the cost of obtaining information about both savings and borrowing opportunities.
