The economic cycle is generally divided into four stages:

1. Expansion: During this stage, the economy experiences sustained growth in output, employment, and income. Demand for goods and services increases, which drives investment and business expansion. Business and consumer confidence is usually high during this phase.

2. Peak: The peak marks the peak of economic expansion. At this stage, production peaks and productive capacity is almost fully utilized. Prices may begin to rise due to high demand and inflationary pressure.

3. Contraction or recession: During this stage, economic activity begins to slow. Production, employment and income decline, and business and consumer confidence fall. Investment and consumer spending tend to decline, leading to lower demand for goods and services.

4. Depression or bottom: In this stage, the economy reaches its lowest point. Production, employment, and income are at their lowest levels, and consumer and business confidence may be at their lowest. However, this stage is usually followed by a recovery as the economy begins to grow again.

After the bottoming stage, the economy generally enters a recovery phase, which marks the beginning of a new economic cycle. These stages of the business cycle are cyclical and can vary in length and severity depending on various factors, such as government policies, economic shocks, and global events.

Translated by: A.M