What are the Four phases of business cycle in economic. easy words?

Answer 1

A business cycle consists of four unique components, each reflecting differing levels of economic activity and the subsequent circumstances occurring during each respective stage. An expansion is where the economy is experiencing positive and increasing economic output. Employment tends to increase (unemployment falls) and there is upward pressure placed on prices (inflation rises) as output rises. A peak is reached when the economy has produced the greatest amount of output. At this point employment is generally at or near its highest level (unemployment is at its lowest level: usually below the full employment rate of approximately 5%) and prices tend to rise more rapidly (inflation accelerates). Following the peak is a recession, or contraction. During this phase output actually decreases (the rate of growth becomes negative); unemployment begins to rise and the inflationary pressure on prices fades In America, due to government involvement, prices usually don't fall, but the rate of inflation decreases). The low point of the cycle occurs next. This is known as a trough and unemployment tends to be at its peak and production at it low point. There is very little upward pressure on prices and in some cases there is downward pressure on prices (deflation). The business cycle is identified and marked by the National Bureau of Economic Research (NEBR), an independent economic "think tank".