CONCEPT: BUSINESS CYCLE

Business cycle is the natural rise and fall in the output (goods and services) produced in an economy. It is also called an economic cycle or trade cycle. It has several different stages- Expansion, Peak, Recession, Depression, Trough, and Recovery

Some economists believe that the business cycle exists naturally in the economy, however, the majority follow the thought that government and legislative (more precisely the central bank) control the cycle. The forces of supply and demand, availability of capital and expectations regarding the future are three main factors that affect the business cycle. It is usually confused with the term Production cycle which means converting raw materials into final goods.

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