Business Cycle Phases

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There are different theories on how to keep an economy stable and growing. Understanding the business cycle is a big part of the solution.

Back in the days, production cycles in agricultural societies were very unpredictable. Whether a harvest was going to be successful or not depended on weather conditions. Moreover, plant and animal diseases had a considerable negative impact on the harvest.

Nowadays, things have changed - societies have become industrial in nature and economic activity tends to be more diversified. Still, we experience short-term and long-term economic movements for various reasons. Population growth, for example, is a crucial factor shaping up an economy’s growth potential.

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