The document outlines the phases of the business cycle, including expansion (recovery, boom, peak) and contraction (recession, depression, trough). Expansion involves increased economic activity and consumer confidence, while contraction is a period of decreasing activity and confidence. Key phases include recovery as activity begins to rise from a trough, boom as rapid growth occurs, peak when activity levels off, recession as activity declines, depression as the decline worsens, and trough when activity hits bottom. Factors shaping the business cycle include volatility of investment, momentum, and technological innovations.

1. Peak
Recession
Depression
Trough
Recovery
Boom
Phases of Business
Cycle

2. Scheme of Presentation
 Introduction
 Different Phases of Business Cycle
o Expansion
• Recovery
• Boom
• Peak
o Contraction
• Recession
• Depression
• Trough
 Factors That Shape Business Cycle

3. Introduction
Definition:- The business cycle is the periodic
but irregular up-and-down movement in
economic activity, measured by fluctuations in
real gross domestic product (GDP) and other
macroeconomic variables.
 How do we measure “up-and-down
movement in business activity ?”
Percent change in real GDP

4. GDP-Real Growth Rate Of India

5. Different Phases of Business
Cycle
 Expansion :-increased consumer
confidence, which translates into higher
levels of business activity.
It consists of three small stages :
1.Recovery
2.Boom
3.Peak

6. 1.Recovery
 The turning point from depression to
expansion is termed as Recovery or
Revival Phase.
 Consumer’s confidence starts to
increase.
 Rise in economic activities.

8. 2.Boom
 Consumer’s confidence starts to increase at a
faster pace.
 Unemployment levels fall.
 Business starts increase their construction
levels.
 Rise in National Income.
 Rapid increase in economy.
 Inflation increase at very high rates.

9. 3.Peak
 The economy has reached its peak.
 Output starts to standstill and level off.
 Consumer’s confidence starts to decline.
 People start to stop their buying.
 GDP begins to decline(bust).

10. • Contraction
 It is a period of decrease in consumer
confidence and economic activity.
 It consists of three smaller stages:
• Recession
• Depression
• Trough

11. 1.Recession
 is a period of reduced economic
activity in which levels of buying,
selling, production, and employment
typically diminish.
 Consumer’s confidence starts to
decrease a little.
 Unemployment is increasing while
inflation is dropping.

13. 2.Depression
 Depression is the most fearful
stage of a trade cycle.
 The phase of depression (also
called slump) is characterized by
low economic activities.
 Rapid decline in general output
and employment.

14. 3.Trough
 Contraction reaches a minimum, or
 Economy hits bottom.
 Output starts to standstill and level off.
 Consumer’s confidence starts to level
off.
 End of recession, growth resumes.

15. Factors that shape business
cycle
 Volatility of investment spending
 Momentum
 Technological Innovations

16. Any Question ??

17. Thank You !!