The Business Cycle
The business cycle, it is also called economic cycle, are periodically and unstable levels in the economy that an economy has in different periods of time. Even though it was considered to be predictable and stable, it is now considered as unpredictable, and unstable that could vary in any time. The Business cycle will guide the businesses, industries, and companies to act in a specific way, depending in which of the 4 phases the business cycle is. Since business cycle could be on the peak and then turn to be in recession, or it could be in recession and change to recovery, it will make each manager to determine what decision will lead their business in the market.
The business Cycle has 4 different phases, which are Prosperity, Recession, Recovery, and Depression. Then it repeats continuously over and over.
1. - Prosperity, it is the phase when the economy passed from Recovery through Prosperity, which means that the economy is growing, and there is more demand in supplies and resources are enough to satisfied demand so that the economy expands. It also lead the economy to be on the peak, which means that there is enough jobs for employees, more capital, more entrepreneurial grow, and so on that will lead the economy in a good level or Boom Period.
2.-Recession, it is the phase when the economy passed from prosperity or Boom period to fall into Recession, which means that the market will be limited, demand falls, unemployment grows, and businesses will turn pessimistic so that they lose confidence. All this make the economy falls and stay in a recession phase for a period of time.
3.-Depression, it is the phase when recession goes worse and fall deeper in the scale of the business cycle. It will lead the economy to continuously