Business Cycle, Recession, Depression

A business cycle can be defined as the expansionary and contractionary phases in the growth rate of the real GDP.


A recession is known as a period of time where when the economy is producing way below the economies potential and has for two consecutive quarters of negative growth.

external image business-cycle-graph-better.jpg

A Depression is a severe and long recession that that is because of many economic productivity, high unemployment and falling prices. Because of the high unemployment and falling prices people tend to loose confidence in the market which causes less investments which causes the economy to start shutting down.

external image job-loss-recess-depress2.gif

Investopedia, "Depression," Accessed April 16, 2012,