Finance
What is The business cycle?
The business cycle is the natural rise and fall of economic activity over time. Economies move through phases — expansion, peak, contraction (recession), and recovery — repeating in a cycle that affects jobs, spending, and growth.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains the business cycle.
Key things to understand
- 1It's the repeating up-and-down of economic activity.
- 2Phases: expansion, peak, contraction, and trough.
- 3It shapes employment, spending, and business profits.
- 4Governments and central banks try to smooth its swings.
Frequently asked questions
- What is the business cycle?
- The recurring pattern of economic expansion and contraction that economies move through over time.
- What are the phases of the business cycle?
- Expansion (growth), peak, contraction (recession), and trough, before recovery begins again.
- Why does the business cycle matter?
- It affects jobs, wages, investment, and how governments and central banks set policy.