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1. Different Stages Of A Business Cycle:
When the Gross Domestic Product fluctuates around its long-term natural growth rate, it is said
to be in a business cycle. It demonstrates how a country's economy alters through time, growing
and shrinking in terms of economic activity. A business cycle is considered over when there has
been one growth and one contraction. The duration of the business cycle forecasts is the amount
of time needed to complete this sequence. A recession is characterized by relatively stagnant
economic growth, whereas a boom is characterized by substantial economic expansion.
Expansion: The expansion phase of the business cycle is the initial step. Indicators of the
economy's health are improving at this stage, including employment, income, output, wages,
profits, demand, and supply of goods and services. The money supply is expanding quickly,
investments are increasing, and debtors typically pay their loans on schedule. As long as the
economy is conducive to expansion, this process continues.
Peak: The second stage of the economic cycle occurs when the economy reaches this point, also
known as saturation or peak. Growth has reached its maximum potential. The economic indices
peak and then reach a plateau. The cost is at its highest. The cycle charting will reach its turning
point at this time. Recession: The phase that follows the peak phase is called the recession. At
this point, the demand for goods and services rapidly and persistently declines. Due to the
producer's immediate need to respond to a decline in order and continue production, the market
becomes oversupplied. Depression: Unemployment has increased correspondingly. Depression
is when economic growth has slowed to a point below the steady growth line. From the above
mentioned, the alternating phases of growth and contraction in overall economic activity are
characteristics of business cycles. The cycle charting calculator is the primary coincident
economic indicator used to determine the official peak and trough dates for the business cycle.