Business Cycle
A Business Cycle is a system cycle in a macroeconomy that flows from economic expansion to economic downturn to economic recovery.
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- Counter-Example(s):
- See: Gross Domestic Product, Compensation & Benefits Review, Real Versus Nominal Value (Economics).
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/business_cycle Retrieved:2014-2-3.
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The term business cycle (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade and economic activity in general over several months or years in an economy organized on free-enterprise principles. [1] The business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around its long-term growth trend. [2]
These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and periods of relative stagnation or decline (a contraction or recession).
Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable.
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- ↑ A. F. Burns and W. C. Mitchell, Measuring business cycles, New York, National Bureau of Economic Research, 1946.
- ↑ Madhani, P. M. (2010).Rebalancing Fixed and Variable Pay in a Sales Organization: A Business Cycle Perspective. Compensation & Benefits Review 42(3), pp. 179–189