The Business Cycle Quiz

Definition and Concepts of Business Cycle

• A business cycle is a type of fluctuation in the aggregate economic activity of a nation, characterized by simultaneous expansions and contractions in many economic activities.
• A business cycle consists of recurring but not periodic sequences of changes in economic activity.
• Business cycles can be defined as recurring and fluctuating levels of economic activity in a country.
• The business cycle refers to the ups and downs in aggregate economic activity, measured by fluctuations in various macroeconomic variables such as:
  • Gross Domestic Product (GDP)
  • Employment
  • Rate of consumption
• The business cycle is not a regular, predictable, or repeating phenomenon, unlike the swing of a pendulum clock.