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Business Cycles and Their Characteristics definitions

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  • Business Cycle
    Pattern of alternating periods of economic growth and decline, reflected in changes to production, income, and employment.
  • GDP
    Total value of goods and services produced within a country, used to track economic performance and business cycle phases.
  • Expansion
    Phase marked by rising production, income, and employment, often accompanied by increasing inflation.
  • Contraction
    Phase characterized by falling production, income, and employment, typically leading to higher unemployment.
  • Peak
    Highest point in the business cycle, signaling the end of expansion and the start of contraction.
  • Trough
    Lowest point in the business cycle, indicating the end of contraction and the beginning of expansion.
  • Unemployment
    Condition where individuals seeking work are unable to find jobs, rising during contractions and falling during expansions.
  • Inflation
    General increase in price levels, typically moving opposite to unemployment during business cycle phases.
  • Shock
    Unexpected event disrupting economic activity, causing sudden expansions or recessions.
  • Irregular Innovation
    Unpredictable technological advances or inventions that trigger rapid economic growth.
  • Productivity Change
    Alteration in output efficiency, often due to technology or resource availability, impacting economic growth.
  • Monetary Policy
    Actions by central banks, such as adjusting money supply, that influence economic activity and business cycle.
  • Political Event
    Occurrences like wars or peace agreements that unexpectedly affect economic stability and business cycle.
  • Financial Instability
    Disruptions in financial markets, such as asset bubbles, leading to economic downturns.
  • Jobless Recovery
    Period when economic growth resumes but unemployment remains elevated, often following a recession.