Business cycle

Business cycle is an economic phenomena that shows the fluctuation of GDP (gross domestic product),
in a period of time and the comparation with the growth trend line. This cycle can also be define not
only by series of time but also geographically. In business cycle we can see :

1. The phases of a business cycle follow a wave-like pattern over time with regard to GDP. In
general, business cycle contain 4 phases, namely : expansion, peak, contraction, and trough.
a. Expansion
When the economic increase called period of expansion. Improvent of economy business is
expanding to such an extent that Normal Maintenance and its suppliers are starting to have
trouble obtaining materials, because the manufacturers have not kept pace with the economic
expansion.
b. Peak
And when it continue to grow until reaches a peak (highest level of GDP growth). When it
become overheated, it means business is at the peak of business cycle.
c. Contraction
Economic can also decrease, shrinking and getting smaller called contraction. Business begins to
slow down.
d. Trough
And it continue to shrink, then reaches a trough (lowest level of real GDP contraction)
The owner have to capture any business that might be had. This means that the business cycle
reach the trough.

2. A growth trend line (GTD) to consider, the expected GDP is.

3. The inflation during the period of expansion to the peak, and growth trend line called inflation.
4. Unemployment during the period of trough and growth trend line

5. The comparation between the real GDP and the expected GDP
6. Possibilities of policy to keep the expected GDP