ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -How Does the Business Cycle Work? The business cycle is a term used by economists to describe the increase and decrease in economic activity over time. The economy is all activities that produce, trade, and consume goods and services within the U.S.-such as businesses, employees, and consumers.

Detailed explanation-2: -Economic growth can be caused by random fluctuations, seasonal fluctuations, changes in the business cycle, and long-term structural causes. Policy can influence the latter two. Business cycles refer to the regular cyclical pattern of economic boom (expansions) and bust (recessions).

Detailed explanation-3: -In the expansionary phase, the economy experiences growth over two or more consecutive quarters. Interest rates are typically lower, employment rates rise, and consumer confidence strengthens.

Detailed explanation-4: -A business cycle is a cycle of fluctuations in the Gross Domestic Product (GDP) around its long-term natural growth rate. It explains the expansion and contraction in economic activity that an economy experiences over time.