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Concordian International School

Economics & Business: Markets

Financial Markets

How the Stock Exchange Works

Overview of the Business Cycle


The term business cycle refers to economy-wide fluctuations in production, trade, and general economic activity. There are four phases that describe the business cycle. At any point in time you are in one of these stages:

  1. Contraction - When the economy starts slowing down. It's usually accompanied by a bear market.
  2. Trough - When the economy hits bottom, usually in a recession.
  3. Expansion - When the economy starts growing again. It's usually signaled by a bull market.
  4. Peak - When the economy is overheated, and is in a state of "irrational exuberance." This is when inflation rears its ugly head.
Thank you to librarian Uma Manikantan's Business Guide, Tanglin  Trust School, Singapore