What Is the Role of the Business Cycle in Economics?

Fluctuations in gross national output, gross income and gross employment. This fluctuation is characterized by the widespread and simultaneous expansion and contraction of many components of the economy, usually lasting 2 to 10 years. In modern macroeconomics, the business cycle occurs when real GDP rises (expands) or decreases (shrinks or declines) relative to potential GDP.

Business cycle

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Fluctuations in gross national output, gross income and gross employment. This fluctuation is characterized by the widespread and simultaneous expansion and contraction of many components of the economy, usually lasting 2 to 10 years. In modern macroeconomics, the business cycle occurs when real GDP rises (expands) or decreases (shrinks or declines) relative to potential GDP.

Business cycles:

Since its inception, capitalism has been plagued by periodicities of inflation (price increases) and depression (high unemployment). For example, there have been nine recessions in the United States since World War II, and several of them have caused millions of people to lose their jobs. These fluctuations are called business cycles.

The business cycle is a commercial rhythm that occurs under the conditions of a mature market economy.It reflects changes in the industrial structure, reflects technological progress, and reflects the improvement of consumer tastes.