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Thursday, 23 August 2018

What is trade cycle in economics?

What is Trade Cycle?

Economies of the world has shown tremendous economic progress during the last 150 years but it does not mean that during last 150 years no economy faced economic struggle. Trade cycle always exists. Trade cycle means fluctuation in economy up and down. It is wrong to say that economic progress has been grown continuously in same direction. There are always some faces of trade Cycles.

Trade-cycle
Trade Cycle

E.g. every businessman knows that after 10 or 20 years, plant and machinery for production will become obsolete which is required to maintain to produce.

So, there are positive and negative faces of the business. Every boom brings with it a slump vice-versa.This is called trade cycle. A business passes through all positive ( prosperity ) and negative ( adversity ).


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