An increase in productivity best completes the diagram of economic growth in business.
Economic growth is defined as an increase in the production of economic goods and services in a certain period of time compared with a previous period. It can be measured both in nominal or real terms. Traditionally, aggregate economic growth is measured either in terms of gross national product (GNP) where production activities by citizens domestically or internationally are calculated; or gross domestic product (GDP) where the production activities within the territory are taken into consideration ( but only of final goods and services), although alternative metrics like NNP, NDP, national income, etc... are sometimes used.
The economy moves through different periods of activity. This movement is called the “business cycle.” It consists of four phases:
1. Expansion where GDP increases and industrial growth occurs.
2. Peak where the expansion stage reaches the peak.
3.Contraction wherein the countries who enjoyed tremendous growth starts to see contraction in their economies, ;eading to recession and crises.
4. Trough is the stage whe neconomic contraction hits its nadir.
A single business cycle is dated from peak to peak or trough to trough. Every business will have a time of ups and downs.
( No internal links available. For further references, visit Business studies' NCERT textbooks)