Business Cycle

Business Cycle is basically defined in terms of periods of expansion or recession. It is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. It is the fluctuation in economic activity that an economy experiences over a period of time. It is usually measured by considering the growth rate of real gross domestic product. Business cycle reflect the possibility that the economy may reach short-run equilibrium at levels below or above full employment.