The business cycle has four main phases: expansion, peak, contraction, and trough.
Expansion: This phase feels good because the economy is growing. But sometimes, businesses spend too much money too quickly. This can lead to problems later on.
Peak: This is when the economy is doing its best. However, prices for things like food and clothes can go up a lot, making it hard for people to buy what they need.
Contraction: In this phase, many businesses have to cut back. Because of this, more people lose their jobs. When people don’t have money, it affects families and the whole community.
Trough: This is the lowest point of the cycle. During this time, things can get really tough. Lots of people struggle to find jobs.
To help with these challenges, governments and central banks can put plans into action. They might spend money to boost the economy or change interest rates. However, these plans often meet resistance, making it hard to find the right solutions.
The business cycle has four main phases: expansion, peak, contraction, and trough.
Expansion: This phase feels good because the economy is growing. But sometimes, businesses spend too much money too quickly. This can lead to problems later on.
Peak: This is when the economy is doing its best. However, prices for things like food and clothes can go up a lot, making it hard for people to buy what they need.
Contraction: In this phase, many businesses have to cut back. Because of this, more people lose their jobs. When people don’t have money, it affects families and the whole community.
Trough: This is the lowest point of the cycle. During this time, things can get really tough. Lots of people struggle to find jobs.
To help with these challenges, governments and central banks can put plans into action. They might spend money to boost the economy or change interest rates. However, these plans often meet resistance, making it hard to find the right solutions.