Question

List the phases of the business cycle and describe how the different phases begin and end

Answer 1

Answer:

Business undergoes a 4 phase cycle namely, a. Expansion b. Saturation c. Recession d. Depression

Explanation:

Business cycle or trade cycle is the representation of ebb and flow of GDP (Gross Domestic Product) on a long run. Every business undergoes boom and bust stages. National Bureau of Economic Research evaluates the economic cycle stages with the help of GDP growth rates.

The first phase expansion is the stage when business advances to the peak (higher level). Saturation phase is when the business stays in the neutral position. The phase when it degrades from the saturation to trough is known as Recession period and finally when the economy cannot be expanded then it attains the stage of depression.