What is the business cycle quizlet?

What is the business cycle quizlet?

A business cycle may be defined as the period between two consecutive peaks. Recession. a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. Depression.

What is the period between the peak and the trough of a business cycle called quizlet?

A general rule is that a recession consists of at least two consecutive quarters in which there is a decline in real GDP. The phase of the business cycle in which real GDP reaches its minimum after falling during a recession. The length of time between the peak and the trough is the recession.

What is a trough in the business cycle quizlet?

Trough. The lowest point of a contraction, or period of economic decline; a trough is followed by economic growth.

What is the business cycle best described as?

The business cycle is best defined as alternating periods of increases and decreases in the rate of inflation in the economy. Fluctuations in real output in the economy are caused by economic shocks, and because prices are sticky, it is difficult for the economy to quickly adjust to such shocks.

What causes business cycles quizlet?

Inflation and deflation causes a business cycle. There are four stages to a business cycle. These are recession, depression, expansion, and peak. Recession is when spending goes down and prices go up.

What is the bottom of the business cycle called?

An expansion begins at the trough (or bottom) of a business cycle and continues until the next peak, while a recession starts at that peak and continues until the following trough.

Why are ups and downs in the business cycle Normal?

Why are ups and downs in the business cycle normal? A. Many events that affect the business cycle are expected and do not occur naturally, such as shortages or surpluses, changes in investment spending, and speculation.

What did you learn about the cycle of a business?

Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough. A peak is the highest point of the business cycle, when the economy is producing at maximum allowable output, employment is at or above full employment, and inflationary pressures on prices are evident.