What Are The Phases Of Trade Cycle?

           Business cycle is an American term for which the British economist coined termed Trade Cycle.  During the last 150 years the world has shown tremendous economic development and growth but it will be wrong to understand that this progress has been steady and sustained and had no bottle necks.

           Every business is subject to ups and downs.  The period of prosperity is converted into failure.  After every period of boon the period burst comes which also is replaced by the boom.  The same oscillation in the business are called trade or business cycle.  A trade cycle could be defined as, 'Trade cycle refers to the total period of business which passes though prosperity and failures'.  

           During the depression period of trade cycles prices and wages coupled with the decrease in production, increase in unemployment while during the period of boom prices and wages coupled with increase in production, unemployment decreased and the level of employment increased.

           Trade cycle is the different phases of rapid increase of the national income.  National income increases fast during the boom period but it slows down gradually and decreases at last.  Decrease in the national income is termed as Economic Recession.  After economic recession boom is repeated once gain and when this boom reaches its peak the trade cycle becomes the recession again.