A change in GDP, whether up or down, usually has a significant effect on the stock market. So it is easy to understand why a bad economy usually means lower profits for companies, which in turn means lower stock prices. A common worry for investors is negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession.
Most business cycles have last three to five years from peak to peak. The average duration of an expansion is 44.8 months and the average duration of a recession is 11 months. The business cycle is the periodic but irregular up-and-down movements in economic activity, measured by fluctuations in real GDP and other macroeconomic variables. A business cycle is not a regular, predictable, or repeating phenomenon. Its timing is random and, to a large degree, unpredictable. A business cycle is identified as a sequence of four phases: peak (when GDP reaches its peak and starts to fall), recession (when GDP is falling over time), trough (point in time), and recovery/expansion (a GDP that has never been reached before).
Business Fixed Investment
The definition of business fixed investment is the