true or false Business Cycle - The Business Cycle is the short-term fluctuations in GDP around an economy's long term growth trend in GDP. The four phases are 1) trough or recession, 2) recovery or expansion. 3) peak or boom, and 4) downturn. Many economic variables are involved in understanding and analyzing the business cycle. A recession is when the real GDP has shrunk for two consecutive quarters and is usually accompanied by a rising unemployment rate