ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A business cycle is a period of macroeconomic expansion followed by a period of contraction. There are four phases in a business cycle: –Expansion: a period of economic growth. –Peak: the height of the expansion.

Detailed explanation-2: -The alternating phases of the business cycle are expansions and contractions (also called recessions). Recessions often start at the peak of the business cycle-when an expansion ends-and end at the trough of the business cycle, when the next expansion begins.

Detailed explanation-3: -Macroeconomics is all about 3 main goals; full employment, stable prices and growth. Unfortunately, capitalist economies have trouble achieving all three goals at all times due to something called the business cycle. The business cycle is the natural ups and downs that come with a capitalist economy.

Detailed explanation-4: -Economic expansion is defined as increased economic activity and growth, measured by the rise in the gross domestic product (GDP), employment, and investment. An economic contraction is the opposite of an expansion. It is when there is a decrease in economic activity and growth.

Detailed explanation-5: -An economic expansion is a period of growth throughout an economy. Because productivity is increasing, it is generally represented on a curve as an upward movement. In some cases, the expansion phase is also known as the “economic recovery” phase because it occurs after the economy has contracted for a long period.