Illustrate the phases of the business cycle.

Illustration should include

• a definition of business cycle
• the four phases of the business cycle

• expansion (recovery)—rise in demand, causing a steady increase in production, income, employment, prices, and profits
• peak (prosperity)—high demand, causing a sustained high level of production, income, employment, prices, and profits
• contraction—falling demand, causing a steady decline in production, income, employment, prices, and profits
• trough—low demand, causing a sustained low level of production, income, employment, prices, and profits.