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Economics
Business Cycle
The natural rise and fall of economic activity over time, moving through expansion, peak, contraction, and trough.
Business cycles last on average 5–7 years but can vary. Governments and central banks try to smooth them using fiscal and monetary policy. No two cycles are exactly the same.
It's the economy breathing — expanding, reaching a peak, contracting, and then starting to recover again.
Real world: The 2008 financial crisis was a deep contraction phase. The years after were the recovery and expansion phase. Understanding the business cycle helps companies and investors prepare for what comes next.
💡 The business cycle is why timing matters in investing and business decisions.