Question

Business cycles have different time lengths. Explain what a business cycle is and provide an example from Canada or another country of an entire business cycle.

Answer 1

A business cycle refers to the various level of growth in the output of a country. Every economy’s market has a business cycle, which means that the output and profit of every country’s market change according to the various factors on which the performance of the market depends.
The market of every economy experience different stages of growth; the output of every economy initially increases, leading to more profits and growth, and when the market reaches its highest level of growth, it starts shrinking and goes to the lowest level of growth and then every economy again experience a higher output than before.
For example, country U experienced a period of recession in 2008 due to which the people living there suffered from various economic losses. The country’s growth and output before this recession were at the highest level, and after this highest growth, the market experienced the next stage of the business cycle, which resulted in recession in the country.