The business cycle refers to the repeated fluctuations of an economy's expansion and contraction. In the long run, an economy should experience positive output growth. As a result, the business cycle is defined as "short-term fluctuations in total output around its trend path" (Begg et al, 1997, 518). Because it is the basic measure of total output of goods and services over a given time period, usually a year, the gross domestic product (GDP) is used to measure business cycles. However, there are enough similarities between cycles to warrant their relevance when studying the state of the economy. The cycle typically has a trough-to-peak pattern. Download this PPT for more information.

Jincy Anna Joy

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