What Are The Four Phases Of The Business Cycle
Camila Farah
Business cycle phases in the business cycle there are 4 phases expansion peak contraction and trough.
A speedup in the pace of economic activity defined by high growth low unemployment and increasing prices. This is the most critical and fearful stage of a trade cycle. Expansion peak contraction and trough. Below is a more detailed description of each stage in the business cycle.
The four phases of business cycles are shown in the following diagram the business cycle starts from a trough lower point and passes through a recovery phase followed by a period of expansion upper turning point and prosperity. In the diagram above the straight line in the middle is the steady growth line. The business cycle moves about the line. During this phase the economy is weakening.
Business cycle phase 1. Among the four phases of the business cycle this is the mirror image of the business cycle expansion phase. Stages of the business cycle. Expansion represents a period of growth the expansion phase of the business cycle represents a period of economic growth.
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The first stage in the business cycle is expansion. The other phases that are expansion peak trough and recovery are intermediary phases. This cycles through periods of economic growth and back into economic rececsion. Business cycles are identified as having four distinct phases.
Figure 2 shows the graphical representation of different phases of a business cycle. The business cycle goes through four major phases. There are basically two important phases in a business cycle that are prosperity and depression. If economic activity contracts enough the economy falls into a recession.
Peak trough contraction and expansion. The federal reserve helps manage the cycle with monetary policy while heads of state and governing bodies use fiscal policy. One of the key questions asked is how long there is between phases. A recession is the substantial decline of economic activity that lasts longer than a few months.
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The period marked from trough to peak.
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Pin On Group 3 Business Studies Assignment 2
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