The business cycle is the periodic but irregular up-and-down movements in economic activity,measured by fluctuations in real GDP and other macroeconomic variables.
A business cycle is not a regular,predictable,or repeating phenomenon like the swing of the pendulum of a clock.Its timing is random and,to a large degress,unpredictable.A business cycle is identified as a sequence of four phases:
1 Contraction (A slowdown in the pace of economic activity)
2 Trough (The lower turning point of a business cycle,where a contraction turns into an expansion)
3 Expansion (A speedup in the pace of economic activity)
4 Peak (The upper turning of a business cycle)
A recession occurs if a contraction is severe enough...A deep trough is called a slump or a depression.The difference between a recession and a depression,which is not well-understood by non-economists