What Are The General Features Required By Business Cycle?

The following are the features required by the business cycle.
First, both periods of boom and slump follow each other at fairly regular intervals. The cycle generally takes 7 to 9 years to complete it unless some external occurrences such as war or catastrophe, etc., intervene. In that case, the interval between one boom and the next or between one crisis and the next may be shorter or longer than the normal.

Secondly, the upswing or down swinging movements of cycle tend to appear in all the industries at the same time. When business is prosperous, production, employments, money wages, interest rates and profits usually rise in all the industries and when it is going at a loss, the case is just the opposite.

Thirdly, the world is knit is one economic unit through international trade if there is prosperity or crisis is one part of the world; it is shared by all other countries of the world too.

Fourthly, during alternating periods of prosperity and depression, all the sectors of the economy are affected but the effect is not the same on all the sectors. When it is a period of depression, the prices of agricultural commodities fall more than the prices of goods produced by manufacturing and industries. The capital goods industries are the worst suffers because the businessmen are not prepared to purchase new machines or renew the old plants. So they are closed.

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