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    The Business Cycle - Introduction To Macroeconomic Indicators

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    Omari Horn
    The document discusses the business cycle, which refers to the ups and downs of an economy over periods of time. The business cycle alternates between expansionary and contractionary phases, with peaks marking high points and troughs marking low points. Expansionary phases involve increasing output and declining unemployment, while contractionary phases involve decreasing output and rising unemployment, with recessions lasting at least two quarters of declining economic activity.

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    The Business Cycle - Introduction To Macroeconomic Indicators

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    Omari Horn
    31 views6 pages
    The document discusses the business cycle, which refers to the ups and downs of an economy over periods of time. The business cycle alternates between expansionary and contractionary phases, with peaks marking high points and troughs marking low points. Expansionary phases involve increasing output and declining unemployment, while contractionary phases involve decreasing output and rising unemployment, with recessions lasting at least two quarters of declining economic activity.

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    The document discusses the business cycle, which refers to the ups and downs of an economy over periods of time. The business cycle alternates between expansionary and contractionary phases, with peaks marking high points and troughs marking low points. Expansionary phases involve increasing output and declining unemployment, while contractionary phases involve decreasing output and rising unemployment, with recessions lasting at least two quarters of declining economic activity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    31 views6 pages

    The Business Cycle - Introduction To Macroeconomic Indicators

    Uploaded by

    Omari Horn
    The document discusses the business cycle, which refers to the ups and downs of an economy over periods of time. The business cycle alternates between expansionary and contractionary phases, with peaks marking high points and troughs marking low points. Expansionary phases involve increasing output and declining unemployment, while contractionary phases involve decreasing output and rising unemployment, with recessions lasting at least two quarters of declining economic activity.

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    You are on page 1of 6

    The Business Cycle

    The Business Cycle - Introduction to Macroeconomic Indicators


    Key Terms
    • Business Cycle
    • Expansionary
    • Peak
    • Contractionary
    • Trough
    • Recovery
    • Recession

    The Business Cycle - Introduction to Macroeconomic Indicators


    The Business Cycle
    Peak
    Long-run trend
    Real GDP of RGDP
    Peak

    Contractionary
    Expansionary
    (Recession)
    (Recovery)

    Trough

    Periods of Time

    The Business Cycle - Introduction to Macroeconomic Indicators


    Explanation of Key Terms
    • The business cycle refers to the ups and downs in an economy. In
    the short run, the economy alternates between the upturns and the
    downturns as measured by the three macroeconomic indicators.
    • Peak is the highest point of the RGDP of the business cycle.
    • Expansionary is the part of the cycle that is increasing. Real output
    is increasing, and the unemployment rate is declining. Inflation may
    begin to accelerate. The early part of the phase from the trough is
    called the recovery phase.

    The Business Cycle - Introduction to Macroeconomic Indicators


    Explanation of Key Terms continued
    • Contractionary is the part of the business cycle that is decreasing.
    Real output is decreasing, and the unemployment rate is rising.
    Inflationary pressures may subside. The later stage of a
    contractionary phase is also called a recession. A recession lasts at
    least 6 months or 2 quarters of the cycle.
    • Trough is the lowest point of RGDP in the business cycle. If a
    trough is particularly deep, it may be called a depression. A
    depression is an economic situation where output falls to especially
    low levels, and unemployment climbs to very high levels. 

    The Business Cycle - Introduction to Macroeconomic Indicators


    The Business Cycle

    The Business Cycle - Introduction to Macroeconomic Indicators

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