Business Cycle

This image shows us an excellent example of a typical business cycle. As time goes on, the level of output in an economy fluctuates between two constantly evolving extremes: the boom and the bust. While the oscillation is constant, the economy (in most cases) is still ever growing. Even if there's a temporary recession (the downward decrease in growth from a boom),  the economy eventually recovers (period of increased economic growth from a bust), and reaches an even higher boom. As this cycle goes on, with ever increasing peaks, the long term trendline is one of constant growth, usually slightly below potential output (unless the economy is undergoing a phenomenon like an inflationary gap).