 It refers to those economic

fluctuations,which are repeated at regular

intervals,as per the economic
connditions,ranging from 4 to 10 or 20
years.

It thereby mainly studies HOW and WHY the

level of National Income fluctuates over a
period of time.
 Therefore we can say that a business cycle
is a swing in total National output,Income
and employment,associated with,either
widespread expansion or contraction in the
sectors of the economy.
 Aggregative economics activity.
 Oscillating Motion.
 Accompanied by ups and downs.
 Cumulative in nature.( Affects overall)
 Varied scope. (Small/Large intensity of waves)
 Employment level.
 Co-Movement of Variables.(Gen. Predictions)
 Recurrent against periodic. ( Not fixed)
 Length and Amplitude differ/Varies.
 Different effects in different sectors/Mkts.
 Profit Fluctuations.
 Affects all industries as a whole.
 Price levels.
  “PROSPERITY”
 (EXPANSION or UPSWING)
 There is a continous rise in the level of effective demand.
 There is continous rise in the consumption expenditure.
 There is continous increase in the level of employment.
 There is continous rise in the commodity prices.
 There is continous rise in the national income-savings
and investment.
 There is a continous increase in the volume of output.
 Its accompanied with supply of money and increase in the
rate of interest.
 Therfore full employment and overall optimism.
 There is an adverse effect on the level of
demand.
 Thereby fall in the consumption expenditure.
 There is a decline in the prices of the
commodities.
 Decline in the national income,savings and
Investment.
 Thereby decrease in the volume of output.
 Decreasing the velocity of circulation of
money.
 Thereby leading into unemployment.
  (CONTRACTION or DOWNSWING)
 There is a continous fall in the level of effective
demand.
 There is a continous fall in the consumption
expenditure.
 There is a continous fall in the level of
Employment.
 There is a continous fall in the factor prices and
commodity prices.
 There is a continous fall in theNational
income,savings and investment.
 There is a continous fall in the volume of output.
 Thereby continous fall in the supply of money.
 There is a REVIVAL on the level of demand.
 There is a Furthur rise in the consumption
expenditure.
 There is a Furthur/continous rise in the level
of Employment.
 There is a Furthur rise in the factor prices and
commodity prices.
 There is a Increase in theNational
income,savings and investment.
 There is a increase in the volume of output.
 Thereby increase in the velocity of circulation
of money and continous and the cycle
repeats.