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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.
