Open Your Eyes Alice and Start Following the Economic Cycle Instead of the White Rabbit: Influential Behaviour of the Economic Cycle

Abstract Economics represents a social science, directly concerning the factors and determinants of commerce, production, distribution, government, management and naturally consumption of goods and services, but unlike the natural sciences, it is unique in the area of hardly finding a broad consensus, whether we talk about rules, methodology, economic processes or basic axioms. Economic cycle would not exist in an economically ideal world where the prices of goods and factors of production are very flexible, people have full information about what is happening in the economy, government and unions do not regulate prices, and so on. Since the real world differs from an economically ideal world, economic cycle presents inevitable reality in every market economy. The aim of our research paper is to analyse essential monetary determinants and the practical aspects of the theory of the business cycle. Moreover, we focus on the instruments of central banks and their impact on the economic cycle, inextricably affecting the socio-economic development and the state of business environment and commerce.