business cycle
Plural
business cycles
1
the rhythmic pattern of economic growth and decline, consisting of phases such as expansion, peak, contraction, and trough
- During an economic expansion phase of the business cycle, consumer spending tends to rise, leading to increased production and job opportunities.
- The peak of the business cycle is marked by high employment levels, robust economic activity, and often, inflationary pressures.
- The trough of the business cycle represents the lowest point, with economic activity bottoming out, and typically precedes a new phase of expansion.
- Central banks often adjust interest rates to influence the business cycle, lowering rates during contractions to stimulate economic activity and raising them during peaks to prevent overheating.
- Businesses that can adapt to the cyclical nature of the economy by diversifying their products or services may be more resilient across various phases of the business cycle.
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