Explain the term business cycle in brief

Question

Explain the term business cycle in brief.

Answer 1

The period of business prosperity alternate along with period of depression. The era of business prosperity consists of within itself the seed of the coming period of depression. One time depression reached the by, recovery starts and rapidly grows in boom or prosperity. On the peak of the boom recession grips the economy that soon slides in depression. To be exact, there are four phase’s are as: boom recession, recovery and depression.

The Business cycles affect business decision. The cycles influence not only the economy within general, but each particularly business firm. The era of prosperity promotes business. It gives new investment opportunities. Similarly, a period of depression slackens business. A manager who is all the time confronted along with the problem of forward planning takes in consideration the phase of the business cycle. It helps to take benefit of the chance ahead or to decrease the chance of heavy losses to the firm.