The Four Stages Of The Business Cycle - 799 Words

The four stages of the business cycle are complex phases that our economy undergoes. To grasp the concept of the stages, you must first be familiarized with the business cycle itself. The business cycle is the alternating periods of growth and decline. Or to be more intricate, â€Å"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,† (Inc.com). A business cycle is comprised of four stages: recovery, peak, recession, and trough. In the recovery, the economy is growing. It is commonly indicated by a bull market. The recovery is the increase in the rate of economic activity established by a moderate to low unemployment percentage, towering development, and swelling prices. The next phase of the business cycle is the peak. The peak is the most desired stage for it is the superior point of the cycle. During this stage, the increased consumer confidence translates into higher levels of business activity. The peak is, â€Å"When the economy is overheated, and is in a state of irrational exuberance,† (Inc.com) In other words, the peak is the point at which the economy is as robust as it can get. Following the peak in the business cycle is the recession. The recession is when the economy is on the decline and jobs are being lost, unemployment rates soars, and production is slowing. It identifies the end of a growth interval in the business cycle. Often,Show MoreRelatedBCG Matrix and the Product Life Cycle1394 Words   |  6 PagesIntroduction: The BCG Matrix and the Product Life Cycle are two important tools that relate to different aspects of a product’s performance: †¢ The BCG looks at market share and market growth and how they impact on cash usage and generation. †¢ The PLC looks at sales/revenues over time and levels of profitability. 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