Business Cycle
📈 Investing
Quick Definition
The business cycle refers to the fluctuations in economic activity that an economy experiences over a period of time, typically characterized by phases of expansion, peak, contraction, and trough.
Examples
- 1During an expansion phase, a company might increase its workforce and production to meet rising demand.
- 2In a contraction phase, businesses may experience declining sales, leading to layoffs and reduced spending.
- 3The peak of a business cycle often sees heightened economic activity and possibly inflation before slowing down.
- 4During the trough phase, the economy is at its lowest point, which may prompt government interventions like stimulus packages.
Tags
business-cycleeconomic-growthrecessionexpansioneconomic-fluctuations
Related Terms
Other terms you might find helpful
Fiscal Policy
Fiscal policy refers to the government's use of spending and taxation to influence the economy.
Inflation
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Monetary Policy
Monetary policy refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/17/2025