The phase of the business cycle when the economy is near or at full employment and the level of real output is at or near capacity is called a peak.
What is the business cycle and why is it important?
Understanding business cycles is crucial for success while running a business. A business cycle is the measured expansion and contraction of economic growth over a given period. It is also referred to as a trade or economic cycle. Business owners can make wise judgments if they have a thorough understanding of business cycles.
What causes a peak in the business cycle?
When the economy reaches its greatest level of output, it enters the peak phase, which also marks the end of the expansion. After this, a contractionary phase sets in once housing starts and employment levels start to drop.
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