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•Depression /Slump - expected to find heavy unemployment,a low level of demand and capital utilization.Profits will be low as will business confidence. •Recovery - the upswing of the trade cycle is characterized by expanding production , the replacement of old machinery,rising consumers' expenditure and increasing profits •Inflation /Recession is the downswing of the trade cycle . This is where falling consumption, decreasing profits and expectations and rising stocks of unsold goods will be characterized in this stage. •Boom - Expectations are high , profits are high and prices will be rising rapidly .Investment will also be high but labor will be short supply

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15y ago
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12y ago

Definition: Ups and downs in the economic activity is called as trade cycleCauses o f trade cycle Following are the causes of trade cycle

1-High population

2- High demand

3-Unemployment

4-War

5- Natural calamities

6-trade union

7-low saving

8-invstment

9-expansion of credit

10-high interest rates

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10y ago

Trade cycles or business cycle is the alternating periods of contraction and expansion in the activity of economic. It has 5 features: 1. Synchronicity 2. International 3. Periodicity 4. Capitalist Economy and 5. Unequal Effect.

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Q: What is trade cycle and explain its causes?
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