The document discusses business cycles, which refer to periodic fluctuations in economic activity between periods of expansion and contraction. It defines a business cycle and explains the key phases: prosperity, contraction, depression, and expansion. Prosperity involves high production and output, while contraction is a decline in economic activity marked by rising unemployment. Depression is the lowest point with high unemployment and low spending. Expansion is the recovery phase with growing output and employment. The causes of business cycles can be both internal, such as consumption and investment, and external, like innovations and political events. Business cycles are measured using indicators like real GDP and unemployment rates.

1. BUSINESS
CYLCES
BY: XB NTANDANE

2. WHAT IS A BUSINESS CYCLE?
https://www.geektonight.com/business-cycle/

3. The Business cycle can be defined
as follows:
 A business cycle refers to periods of expansion and contraction.
 Business cycle is the period of growth and decline of economic activities.
 Business cycle defined as the increase and decrease of economic activities.
A peak is the high point following a period of economic expansion.
A trough is the low point following a period of economic decline.
The recurring and fluctuating levels of economic activity that an economy experiences over a long
period of time.

4. Diagram showing a business cycle
https://marketbusinessnews.com/financial-glossary/business-
cycle/

5. The phases
of a
business
cycle
Prosperity phase
Contraction phase
Depression phase
Expansion phase

6. Prosperity phase
It can also be referred to
as the peak period.
This Phase Is
Characterised By Good
Trade In Which Production
Activities Are In The Full
Swim/Swing.
Rapid increase in supply &
modest increase in prices
Supply in later stages
increases with a lag & this
leads to rise in prices
which gathers momentum
later on.
Means the end of
expansion and the
beginning of contraction
It is where the economy
stops booming
Businesses can’t increase
production and labour.
High level of output
Low unemployment High level of production

7. Cont…

8. Contraction phase
Also referred to
as recession
phase
Period of decline
in economic
activities
Unemployment
rate increases
Period of
retrenchment
Decline in
output
Deflation occurs

9. Cont…

10. Depression phase
Also known as trough phase
It is the lowest level of business cycle
 High unemployment rate
Low spending
Stock prices decline

11. Expansion phase
Also known as the recovery phase
 Low unemployment rate
Salaries and wages rises
High demands for goods and more spending
Investments increases
 Production increases

12. How do we measure business
cycle?
The business cycle is the periodic but irregular up and- down
movements in economic activity, measured by fluctuations in
Real GDP and other macroeconomic variables.

13. The causes of business cycles:
INTERNAL FACTORS
 Consumption.
 Business investments.
 Government activities.
EXTERNAL FACTORS
 Inventions and innovations.
 Wars and political events.

14. REFERENCE LIST
Aatur, P. What is business cycle, understand the concept of business cycle. February 12, 2018.
https://www.slideshare.net/AaturPorwal/business-cycle-87825433?qid=3a21373e-c91d-44ab-baa9-
e92bdc99d0ce&v=&b=&from_search=6
Sikhulile P, B. Business cycle presentation. September 17, 2018. https://www.slideshare.net/SikhulilePriscillah/business-
cycle-114993089?qid=8d11dcde-ecbb-49da-a34d-871ee3a2830f&v=&b=&from_search=7
Simran, K (September 24, 2017). Business cycle: introduction, features, phases of business cycle.
https://www.slideshare.net/SimranKaur116/business-cycle-80102094?qid=aeb1fa71-f465-4b7e-825f-
1fd710324ee9&v=&b=&from_search=5
Akshay, A (August 17, 2014). Business cycle. https://www.slideshare.net/AkshayAggarwal/business-cycle-
38070797?qid=76a1c516-e5bc-4918-9d41-eb0b37cefbc0&v=&b=&from_search=2
Pritam977 (October 06, 2014). A business cycle. https://www.slideshare.net/pritam977/business-cycle-
39919306?qid=d23d6cf8-394d-47f3-9a9e-6825b74dbb67&v=&b=&from_search=3

15. THE END