Business Cycle

Does your business grow... or decline?

What Exactly is Business Cycle?

The economy grows over time but it does not grow at a constant rate, it more goes through intervals of decline and growth. A business cycle graph shows the decline and growth of the real GDP of a business.

There are two parts to every Business Cycle

Expansion

Expansion is the point during the business cycle when the business is growing; all businesses start with this. At the end of an expansion the business starts to level off, this is called the peak.

Recssion

Recession is the period of time that happens after the peak of a business where it starts to decline. At the end of recession the business starts to level off again, but this is called a trough.
Macro 2.6- Business Cycle Unit Summary