Business Cycle Phases describe recurring patterns of economic expansion and contraction. Four phases: Expansion/Recovery (output increasing, unemployment falling, prices rising moderately, confidence building), Peak (maximum output, lowest unemployment, highest prices, then turning point), Contraction/Recession (output falling, unemployment rising, prices stabilizing or falling, confidence declining), Trough (minimum output, highest unemployment, then recovery begins). Characteristics of each phase: Expansion—rising investment, profits, wages, consumption. Peak—resources fully utilized, potential inflation. Contraction—falling investment, profits, unemployment rises, income declines. Trough—economic pessimism, potential for recovery with policy support. Duration: Varies from several months to years; post-war cycles typically 4-8 years. Causes: Demand fluctuations, supply shocks, policy changes, international factors, psychological factors. Measurement: Using GDP, unemployment rate, inflation rate, industrial production. Control: Fiscal policy (taxation, spending), monetary policy (interest rates, money supply). Indian cycles: Post-liberalization cycles, 2008 crisis impact, recent slowdown and recovery. ICAI tests: Identifying phases, understanding characteristics, policy responses. Exam tip: Know the sequence: Expansion → Peak → Contraction → Trough → (back to Expansion).