Overview
Business cycle theories are essential for understanding the fluctuations in economic activity that occur over time. These cycles consist of four main phases: expansion, peak, contraction, and trough. Each phase has distinct characteristics and impacts on the economy, influencing employment, inflatio...
Key Terms
Example: During an economic expansion, businesses invest more and hire additional employees.
Example: The 2008 financial crisis led to a global recession.
Example: After the recession, the economy showed signs of recovery with increased consumer spending.
Example: The Great Depression of the 1930s was a major economic depression.
Example: Keynesian economists suggest increasing government spending during a recession.
Example: Monetarists argue that controlling inflation is key to economic stability.