The cyclical behavior of output and employment is largely determined by the strength of aggregate demand, which is a measure of the total amount of goods and services that are being produced and consumed in an economy. When aggregate demand is weak, it can lead to recessions, which are characterized by falling outputs, reduced employment, and sluggish economic activity. This is often caused by a number of factors, such as a reduction in consumer spending, a slowdown in business investment, or a tightening of credit conditions.