Economic cycles refer to the fluctuations in economic activity that an economy experiences over time. These cycles typically consist of four phases: expansion, peak, contraction, and trough. During the expansion phase, economic activity increases, leading to higher employment and production. The peak represents the highest point of economic activity before a downturn begins. In the contraction phase, economic activity declines, resulting in reduced spending and increased unemployment. This phase continues until the economy reaches the trough, the lowest point of the cycle. After the trough, the economy can begin to recover, starting the cycle anew with another expansion phase.