 DEFINITION |
Business cycles are periodic swings
in an economy’s pace of demand and production activity. These cycles
are characterized by alternating phases of growth and stagnation. A period
in which real GDP is rising steadily is called an economic expansion,
and a period in which it is falling steadily is called a recession. The
early stage of an expansion, following a recession, is called an economic
recovery. Although these cycles are part of the natural ebb and flow of
economic activity, their length is difficult to predict.
| HOW
DOES IT AFFECT CANADIANS? |
Business cycles have a direct impact on Canadians. Periods
of economic boom bring jobs, growth and economic prosperity. Slowdowns
in the economy, on the other hand, hurt businesses and put people out
of work.
| EXAMPLES |
The most serious economic contraction experienced in Canada
in the last century was the Great Depression in the early 1930s. Canada
has also had two serious recessions in more recent years—in 1982
and in the early 1990s. In the late 1990s and early 2000s, Canada experienced
a period of healthy economic expansion and prosperity.
| LINK |
Key economic events – The
Great Depression
Source: Canadian Economy Online
|
