ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In the recession phase, the demand for goods and services starts declining rapidly. Prices tend to fall and economic indicators such as income, output and wages start to decline. 4. The growth in the economy continues to decline and there is rise of unemployment in the depression phase.

Detailed explanation-2: -Expansion The first stage in the business cycle is expansion. In this stage, there is an increase in positive economic indicators such as employment, income, output, wages, profits, demand, and supply of goods and services.

Detailed explanation-3: -The business cycle goes through four major phases: expansion, peak, contraction, and trough. All economies go through this cycle, though the length and intensity of each phase varies.

Detailed explanation-4: -As inventories dwindle, businesses eventually use down their inventories to the point where they are short. This, in turn, starts an increase in inventory levels as companies begin to produce more than is sold, leading to an economic expansion.