| A | B |
|---|
| Business Cycle | Ups and downs in economic activty |
| Real GDP | GDP adjusted for inflation |
| Standard of living | A benefit to producers and consumers of a growing economy is it provides a higher this |
| Businesses | this group should understand businesess cycles to make plans to help level out business cycles |
| Varying | Length of business cycles |
| Expansion | Time when Production and employment are increasing |
| Growth(expansion) | Consumers and producers are borrowing money in this phase |
| Peak | Top of Business Cycle |
| Top | At what point are there most likely going to be shortages of workers in certain skill areas |
| Maximum | Producers are producing at this level in the peak |
| Contraction | Once a peak has been reached and demand outstrips supply and prices rise what will be next |
| Expansion | unemployment is low, consumer spending is high and factories are increasing |
| Recession | Contraction lasts for 6 months |
| Trough | High level of business failures and and unemployment |
| Bottom | The trough is this part of the business cycle |
| aggregate demand | total demand for goods and services |
| Production | Businesses will tend to raise this when aggregate demand is rising |
| Inflation | What will probably happen if aggregate demand continues to rise if production can't meet it |
| Taxes or interest rate | Gov't can restrict flow of money by increasing this |
| Money Supply | total quantity of money existing in a nation |
| High Unemployment | Characteristic of a business cycle when there is a short money supply |
| Investment in Capital Goods | What producers will tend to increase when hopeful about business outlook |
| Increasing inventory | This expands economic activities |
| Climatic Changes | This external cause of business cycle may be from a drought or tornado |
| Discoveries | These innovations may cause new jobs to be created |
