What Is The Economic Trade Cycle And What Are The Four Phases Of It?

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amber Jhon Profile
amber Jhon answered
Economic trade cycle includes the fluctuations in the economic activity and it has four phases.

There are four phases in trade cycle. First phase is BOOM, which is the face of high growth. Second phase is the PEAK, in which the trade cycle is on the top. Third phase is DOWNTURN or RECESSION, which is the fall in the economic growth. The last and fourth phase is RECOVERY, which is the upturn of economic growth.

In all of these phases there is different economic growth. Although there is neither a precise movement of activity level nor there is regular patterns but still terminology, Economic trade cycle can give a clear distinction between boom and slump over a period of time.

Abid Qayyum Profile
Abid Qayyum answered
The economy tends to experience different trends. These can be categorised as the trade cycle and may feature boom, slump, recession and recovery
BOOM: A period of fast economic growth. Output is high due to increased demand, unemployment is low. Business confidence may be high leading to increased investment. Consumer confidence may lead to extra spending.
SLUMP: A period when output slows down due to a reduction in demand. Confidence may begin to suffer.
RECESSION: A period where economic growth slows down and the level of output may actually decrease. Unemployment is likely to increase. Firms may lose confidence and reduce investment. Individuals may save rather than spend.
RECOVERY: A period when the economy moves between recession and a boom.

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