Which of the following describes best a typical trade cycle?a)Economic...
Trade Cycle
The trade cycle is a recurring phenomenon in the economy characterized by the expansion and contraction of economic activity. It is also known as the business cycle or economic cycle. The trade cycle consists of four phases, namely, expansion, peak, contraction, and trough.
Typical Trade Cycle
The typical trade cycle is characterized by the following:
1. Economic Expansion: The first phase of the trade cycle is the expansion phase where the economy experiences an increase in economic activity. This is typically characterized by rising GDP, increasing employment, and rising incomes.
2. Peak: The second phase of the trade cycle is the peak phase where the economy reaches its maximum level of output. This is typically characterized by high levels of inflation, rising interest rates, and a tight labor market.
3. Economic Contraction: The third phase of the trade cycle is the contraction phase where the economy experiences a decline in economic activity. This is typically characterized by falling GDP, rising unemployment, and declining incomes.
4. Trough: The fourth phase of the trade cycle is the trough phase where the economy reaches its lowest level of output. This is typically characterized by low levels of inflation, falling interest rates, and a weak labor market.
In summary, the typical trade cycle is characterized by the expansion phase, peak phase, contraction phase, and trough phase. Economic expansions are followed by economic contractions, which are then followed by another economic expansion. The trade cycle is a recurring phenomenon in the economy, and understanding its phases is important for policymakers and investors.
Which of the following describes best a typical trade cycle?a)Economic...
A
To make sure you are not studying endlessly, EduRev has designed CA CPT study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA CPT.