See the below image for the Economic cycle diagram. What is the ‘Economic Cycle’. The economic cycle is the natural fluctuation of the economy between periods of expansion (growth) and contraction (recession).
Factors that are used to indicate the stages in the economic cycle include gross domestic product, consumer spending, interest rates, and inflation. The National Bureau of Economic Research is a leading source for indicating the length of a cycle, as measured from peak to peak or trough to trough. What Are the Stages of an Economic Cycle?
GDP measures the aggregate value of goods and services and is used to depict the overall wealth of an economy. Higher GDP usually correlates with more well-off citizens. The economic cycle goes through four stages: Once the cycle is complete, it continues from the start again.