Economic Definition of supply-driven business cycle. Defined.
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Term supply-driven business cycle Definition: Business cycle instability caused by changes in one or more of the determinants underlying the aggregate supply of gross domestic product; including production cost, technology, and resource quantities. This is one of two basic types of business cycles; the other being demand-drive business cycle. Demand-driven business cycles tend to be the more common of the two types. In general, supply-driven business cycles tend to be more closely associated with long-run changes in the economy, while demand-driven business cycles are more responsible for short-term instability.market.