- Business Cycle
- SSEMA1f
- Define the stages of the business cycle, include peak, contraction, trough, recovery, expansion as well as recession and depression.
5 Key Economic Indicators - Gross Domestic Product (GDP)
- The Business Cycle
- The Unemployment Rate
- Inflation
- Consumer Price Index (CPI)
What Is the Business Cycle? - KEY CONCEPTS
- Changes in the economy often follow a broad pattern:
- Business cycle—series of periods of expanding and contracting activity
- Measured by increases or decreases in real GDP
- Has four phases:
- 1. Expansion
- 2. Peak
- 3. Contraction
- 4. Trough ( length can vary)
What Is the Business Cycle? - Stage 1: Expansion/Recovery
- Expansion is a period of Economic Growth—increase in real GDP
- During an expansion
- Jobs easier to find; unemployment drops
- More resources needed to keep up with spending demand
- as resources become scarce, their prices rise
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