The four stages of the business life cycle

1. Boom- which occurs when levels of spending, production and employment are high within an economy.
2. Downswing- happens when characteristics of falling levels of demand and declining levels of output and employment occur in the market.
3. Slump- takes place when production is at its lowest, unemployment is high and there are many business failures
4. Recovery or upswing- occurs when unemployment rates begin to fall with production slowly increasing and businesses are less likely to fail.