Activity. Wars, for example, can be economically very disruptive. Still other economists view the

Cycle as a purely monetary phenomenon. When government create(s) too much money, an inflationary

Boom is generated; a relative paucity of money will precipitate a declining output and

Unemployment. Other economists have explained the business cycle in terms of political and random

Events.

Still most economists believe that the immediate determinant of the levels of national output

Aid employment is the level of total or aggregate expenditures. Crudely stated, if total spending is

Low, many businesses will not find it profitable to produce a large volume of goods and services.

Hence, output, employment, and the level of incomes will all be low. Certainly, it must not be

Concluded that all changes in.business activity are due to the business cycle.

There are seasonal variations in business activity. It is also subject to a secular trend. The secular

Trend of an economy is its expansion or contraction over a long period of years, for example. 25.

Or 100 years.

C) Cyclical impact

The business cycle is pervasive; it is felt in virtually every nook and cranny of the economy. Yet

We must keep in mind that various individuals and various segments of the economy are effected in

Different ways and in different degrees by the business cycle. In so far as production and employment