Ever feel like the economy is a rollercoaster? That's because it kind of is! We call these ups and downs the business cycle. Think of it as a recurring pattern of economic expansion and contraction.
Generally, it involves four phases: **Expansion (boom)**, where things are looking up – jobs are plentiful, and businesses thrive. Then comes the **Peak**, the highest point before things start to cool down.
After the peak, we enter **Contraction (recession)**. Businesses slow down, and unemployment rises. Finally, the **Trough** is the lowest point before the cycle starts again, leading back into expansion.
Understanding these phases can help you make informed financial decisions, whether you're running a business or just managing your personal finances. Stay informed, and prepare for the ride!