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<p>One important factor of business fluctuations is changes to aggregate Demand. Like I said before, any changes made to consumption, investment or government expenditure will change aggregate demand which as obvious will have fluctuations in Business cycle. Though we are having a combine topic of business cycle and aggregate demand. Let me first explain the basic elements of what Business cycle or fluctuations are:</p>
<h2>Definition of Business Cycle</h2>
<blockquote><p> With reference to the book of Samuelson “Business Cycle are economy-wide fluctuations in total national output, income and employment , usually lasting for a period of 2 to 10 years, marked by widespread expansion or contraction in most sectors of the economy.”</p>
</blockquote>
<p> <a href="http://mba-tutorials.com//wp-content/uploads/2014/03/business-cycle.jpg"><img title="business cycle" style="border-top: 0px; border-right: 0px; background-image: none; border-bottom: 0px; float: none; padding-top: 0px; padding-left: 0px; margin-left: auto; border-left: 0px; display: block; padding-right: 0px; margin-right: auto" border="0" alt="business cycle" src="http://mba-tutorials.com//wp-content/uploads/2014/03/business-cycle_thumb.jpg" width="442" height="300"/></a></p>
<h2>Phases of Business Cycle</h2>
<p> There are two main phases of Business cycle:</p>
<ol>
<li>Recession </li>
<li>Expansion </li>
</ol>
<p> And two turning points
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