chapter 12.2 business cycles

Chapter 12.2 Business Cycles

Four Phases of the Business Cycle

Expansion/Recovery

Peak -

Contraction/Recession

Trough -

What is the long term trend in GDP?

BUSINESS CYCLE GRAPH

REAL

GDP

TIME

LONG TERM TREND

Chapter 12.2 Business Cycles

Four Phases of the Business Cycle

Expansion

/Recovery

Peak

Contraction

/Recession

Trough -

What is the long term trend in GDP?

BUSINESS CYCLE GRAPH

REAL

GDP

TIME

LONG TERM TREND

-a period of increased output and employment. Full employment may be reached and price levels may be increasing.

Exp

ansi

on

Exp

ansi

on

Exp

ansi

on

Chapter 12.2 Business Cycles

Four Phases of the Business Cycle

Expansion /Recovery

Peak

Contraction /Recession

Trough

What is the long term trend in GDP?

BUSINESS CYCLE GRAPH

REAL

GDP

TIME

LONG TERM TREND

- a period of increased output and employment. Full employment may be reached and price levels may be increasing.

Exp

ansi

on

Exp

ansi

on

Exp

ansi

on

- a temporary maximum level of output, usually characterized by high inflation and low unemployment

Peak

Peak

Chapter 12.2 Business Cycles

Four Phases of the Business Cycle

Expansion/Recovery

Peak

Contraction/Recession

Trough

What is the long term trend in GDP?

BUSINESS CYCLE GRAPH

REAL

GDP

TIME

LONG TERM TREND

-a period of increased output and employment. Full employment may be reached and price levels may be increasing.

Exp

ansi

on

Exp

ansi

on

Exp

ansi

on

- a temporary maximum level of output, usually characterized by high inflation and low unemployment

Peak

Peak

- a period of decline in total output, income, employment, and trade lasting 6 months or longer.

Contraction

Contraction

Chapter 12.2 Business Cycles

Four Phases of the Business Cycle

Expansion /Recovery

Peak

Contraction/Recession

Trough

What is the long term trend in GDP?

BUSINESS CYCLE GRAPH

REAL

GDP

TIME

LONG TERM TREND

- A period of increased output and employment. Full employment may be reached and price levels may be increasing.

Exp

ansi

on

Exp

ansi

on

Exp

ansi

on

- A temporary maximum level of output, usually characterized by high inflation and low unemployment.

Peak

Peak

- A period of decline in total output, income, employment, and trade lasting 6 months or longer.

Contraction

Contraction

- The lowest level of output and employment within a cycle. Inflation is typically very low.

Trough

Trough