ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The economic cycle, also known as a business cycle, refers to fluctuations of the economy between periods of expansion (growth) and contraction (recession).

Detailed explanation-2: -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-3: -Expansion is the phase of the business cycle where real gross domestic product (GDP) grows for two or more consecutive quarters, moving from a trough to a peak. Expansion is typically accompanied by a rise in employment, consumer confidence, and equity markets and is also referred to as an economic recovery.

Detailed explanation-4: -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-5: -When an economy is expanding, the amount of goods and services being produced is rising. During a contraction (or recession), the amount of goods and services being produced is falling. One key distinction to be aware of when talking about gross domestic product is the difference between nominal GDP and real GDP.