Phase of Business Cycle

1. Boom
   • Production capacity is fully utilize
   • Products fetch an above-normal price which gives higher profit
2. Recession
   • Downward tendency in demand is observed
   • The supply now exceeds demand
   • This phase of the business cycle is known as the crisis
3. Depression
   • Underemployment of both men and material is a characteristic of this phase
   • The aggregate economic activity is at its bottom
4. Recovery
   • The idle workers now come forward to work at low wages
   • The bank with accumulated cash reserves, now come forward to give loan at easier terms and lower rate
   • Increase income lead to increase demand