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Economics 101: Business Cycle | SterlingTerrell.net

Economics 101: Business Cycle


What is a business cycle?

A Business Cycle is the growth and contraction of economic activity over time in a given economy.

The four phases are: Peak, Downturn, Trough, and Upturn.

Realistically, a business cycle usually exhibits itself as some period of growth followed by an economic recession. This then repeats over time.

The interesting part of it all is is asking: What causes the business cycle?

Many think artificial bubbles and the natural correction of those bubbles in the business cycle is caused, in full or in part, by unintended consequences of regulations and monetary policies that price fix the cost of money, also know as interest rates.