Answer:
The entire economy itself is in decline.
The natural rise and fall in economic growth that takes place throughout time is known as the business cycle. An effective tool for studying the economy is the cycle. It may also aid in improving your financial judgment.
Each business cycle has four stages. Expansion, Peak, Contraction & Trough.
Expansion is between the trough and the peak. The economy is rising at that time. Economic output as measured by GDP is rising. For industrialized economies, the growth rate is in the healthy 2-3% range, but for emerging economies, it is beyond 7%. The rate of unemployment approaches its normal level, which is 4.5–5%. The aim for inflation is just around 2 percent. There is a bull market in stocks. A well-run economy may continue to grow for a long time. Another name for this is a "Goldilocks Economy."
When the economy overheats, the expansion period is about to expire. When the GDP growth rate is more than 3%, that is. The rate of inflation is more than 2 percent and might perhaps top 10 percent. When investors experience "irrational exuberance," asset bubbles are the result.
The peak is the second phase. This month marks the change from the growth phase to the contraction phase.
The third phase is contraction which begins at the peak and ends with a trough. When the economy is contracting, economic growth is modest and GDP declines. Economic experts refer to an economic downturn as a "Recession" when GDP declines (as it always does). Public employment losses and mass layoffs are now frequent news items. The unemployment rate starts to increase, but because it is a lagging indicator, it usually doesn't increase until the recession phase is often nearing to a conclusion. Stock markets are in a gloomy trend at this time as investors keep selling.
The trough is the fourth phase. In that month, the economy switches from a contractionary to an expansionary phase. When the economy reaches its lowest point. The four stages of the business cycle are known as the "boom and bust cycle" because of how severe they may be.
Learn more about the business cycle:
https://brainly.com/question/15072650 (What is a business cycle?)
https://brainly.com/question/26086110 (The fluctuations of the business cycle)
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