The document discusses the business cycle, which refers to fluctuations in economic activity that occur on a regular basis ranging from 4 to 20 years. A business cycle involves periods of expansion and contraction in aggregate output, income, employment, and prices across the economy. Key aspects of business cycles include their oscillating and cumulative nature, varied scope and effects on different sectors, and impact on factors like employment, profits, and price levels. The cycle typically moves from periods of prosperity/expansion to contraction/recession and then revival again.
The document discusses the business cycle, which refers to fluctuations in economic activity that occur on a regular basis ranging from 4 to 20 years. A business cycle involves periods of expansion and contraction in aggregate output, income, employment, and prices across the economy. Key aspects of business cycles include their oscillating and cumulative nature, varied scope and effects on different sectors, and impact on factors like employment, profits, and price levels. The cycle typically moves from periods of prosperity/expansion to contraction/recession and then revival again.
The document discusses the business cycle, which refers to fluctuations in economic activity that occur on a regular basis ranging from 4 to 20 years. A business cycle involves periods of expansion and contraction in aggregate output, income, employment, and prices across the economy. Key aspects of business cycles include their oscillating and cumulative nature, varied scope and effects on different sectors, and impact on factors like employment, profits, and price levels. The cycle typically moves from periods of prosperity/expansion to contraction/recession and then revival again.
The document discusses the business cycle, which refers to fluctuations in economic activity that occur on a regular basis ranging from 4 to 20 years. A business cycle involves periods of expansion and contraction in aggregate output, income, employment, and prices across the economy. Key aspects of business cycles include their oscillating and cumulative nature, varied scope and effects on different sectors, and impact on factors like employment, profits, and price levels. The cycle typically moves from periods of prosperity/expansion to contraction/recession and then revival again.
intervals,as per the economic connditions,ranging from 4 to 10 or 20 years.
It thereby mainly studies HOW and WHY the
level of National Income fluctuates over a period of time. Therefore we can say that a business cycle is a swing in total National output,Income and employment,associated with,either widespread expansion or contraction in the sectors of the economy. Aggregative economics activity. Oscillating Motion. Accompanied by ups and downs. Cumulative in nature.( Affects overall) Varied scope. (Small/Large intensity of waves) Employment level. Co-Movement of Variables.(Gen. Predictions) Recurrent against periodic. ( Not fixed) Length and Amplitude differ/Varies. Different effects in different sectors/Mkts. Profit Fluctuations. Affects all industries as a whole. Price levels. “PROSPERITY” (EXPANSION or UPSWING) There is a continous rise in the level of effective demand. There is continous rise in the consumption expenditure. There is continous increase in the level of employment. There is continous rise in the commodity prices. There is continous rise in the national income-savings and investment. There is a continous increase in the volume of output. Its accompanied with supply of money and increase in the rate of interest. Therfore full employment and overall optimism. There is an adverse effect on the level of demand. Thereby fall in the consumption expenditure. There is a decline in the prices of the commodities. Decline in the national income,savings and Investment. Thereby decrease in the volume of output. Decreasing the velocity of circulation of money. Thereby leading into unemployment. (CONTRACTION or DOWNSWING) There is a continous fall in the level of effective demand. There is a continous fall in the consumption expenditure. There is a continous fall in the level of Employment. There is a continous fall in the factor prices and commodity prices. There is a continous fall in theNational income,savings and investment. There is a continous fall in the volume of output. Thereby continous fall in the supply of money. There is a REVIVAL on the level of demand. There is a Furthur rise in the consumption expenditure. There is a Furthur/continous rise in the level of Employment. There is a Furthur rise in the factor prices and commodity prices. There is a Increase in theNational income,savings and investment. There is a increase in the volume of output. Thereby increase in the velocity of circulation of money and continous and the cycle repeats.