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1. www.khanacademy.org › economics-finance-domain › apLesson summary: Business cycles (article) | Khan Academy

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   Every nation’s economy fluctuates between periods of expansion and contraction. These changes are caused by levels of employment, productivity, and the total demand for and supply of the nation’s goods and services. In the short-run, these changes lead to periods of expansion and recession.

2. www.investopedia.com › terms › bBusiness Cycle: What It Is, How to Measure It, and Its 4 Phases

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   Jun 6, 2024 · Business cycles are composed of concerted cyclical upswings and downswings in the broad measures of economic activity—output, employment, income, and sales. The alternating phases of the ...

   • Author: Lakshman Achuthan

   • Video Duration: 2 min

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3. www.investopedia.com › terms › eEconomic Cycle: Definition and 4 Stages of the Business Cycle

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   Dec 19, 2023 · An economic cycle, also known as a business cycle, refers to economic fluctuations between periods of expansion and contraction. Factors such as gross domestic product (GDP) , interest rates,...

4. www.thoughtco.com › phases-of-the-business-cycleWhat Are the Phases of the Business Cycle? - ThoughtCo

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   Jul 12, 2019 · Contraction: A slowdown in the pace of economic activity defined by low or stagnant growth, high unemployment, and declining prices. It is the period from peak to trough. Trough: The lowest turning point of a business cycle in which a contraction turns into an expansion. This turning point is also called Recovery .

   • Author: Mike Moffatt

5. www.investopedia.com › terms › cContraction: Definition, How It Works, Examples, and Stages

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   Jun 26, 2024 · Contraction, in economics, refers to a phase of the business cycle in which the economy as a whole is in decline. A contraction generally occurs after the business cycle peaks, but before it...

6. www.thebalancemoney.com › what-is-the-businessWhat Is the Business Cycle? - The Balance

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   Jun 12, 2024 · Contraction . The third phase is the contraction stage. It begins after the economy peaks and ends when GDP and other indicators cease to decrease. In this stage, the economy does not experience growth; instead, it shrinks. When the GDP rate turns negative, the economy enters a recession.

7. People also ask

   What is contraction in economics?

   • Contraction, in economics, refers to a phase of the business cycle in which the economy as a whole is in decline. A contraction generally occurs after the business cycle peaks, but before it becomes a trough.

   Contraction: Definition, How It Works, Examples, and Stages

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   What is a contraction in a business cycle?

   • A contraction refers to an economy in decline. It is the third of four phases of the business cycle—the other three are expansion, peak, and trough. Contractions occur after a cycle peaks, but before it becomes a trough. A business cycle is, in large part, measured in terms of a country’s real gross domestic product (GDP).

   Contraction: Definition, How It Works, Examples, and Stages

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   Why do contractions last longer than expansions in a business cycle?

   • The measure of GDP then declines as prices fall. This is called the contraction period of a business cycle. The process then repeats itself, as lower prices increase the demand again. Typically, expansions last longer than contractions in the business cycle because growth is the expected phase for a healthy economy.

   Business Cycles in Canada | The Canadian Encyclopedia

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   What are the alternating phases of a business cycle?

   • Business cycles are composed of concerted cyclical upswings and downswings in the broad measures of economic activity—output, employment, income, and sales. The alternating phases of the business cycle are expansions and contractions. Contractions often lead to recessions, but the entire phase isn't always a recession.

   Business Cycle: What It Is, How to Measure It, the 4 Phases - Investopedia

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8. www.thecanadianencyclopedia.ca › en › articleBusiness Cycles in Canada | The Canadian Encyclopedia

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   Feb 6, 2006 · This is called the contraction period of a business cycle. The process then repeats itself, as lower prices increase the demand again. Typically, expansions last longer than contractions in the business cycle because growth is the expected phase for a healthy economy.