Which term describes the economic fluctuations, including periods of growth and decline?

The term that describes the economic fluctuations, including periods of growth and decline, is known as the business cycle. This concept encompasses the various phases that an economy goes through over time, including expansion, peak, contraction, and trough. During the expansion phase, economic activity increases, leading to growth in GDP, employment, and consumer spending. Conversely, during the contraction phase, economic activity decreases, resulting in a slowdown, which can lead to recession if the decline is significant and prolonged.

Understanding the business cycle is crucial as it helps economists, policymakers, and businesses anticipate changes in the economy and adjust their strategies accordingly. This cycle reflects the dynamic nature of economies, which experience regular fluctuations due to various factors, including consumer confidence, government policy, and external events.

In contrast, market volatility refers to the rapid and unpredictable changes in the price of assets in financial markets, which encompasses short-term fluctuations rather than the longer-term patterns of economic growth and decline described by the business cycle. Cyclical recession specifically refers to a downturn that is part of the business cycle, but it does not capture the entire spectrum of economic fluctuations. Economic stability, on the other hand, suggests a steady state with minimal fluctuations, which is not aligned with the concept of the business cycle