10 Questions
What is the definition of the Business Cycle?
A periodic fluctuation in economic activity measured by change in Real GDP
What phase of the Business Cycle is characterized by the lowest level of production and employment?
Trough/Depression
Which phase of the Business Cycle follows the Expansion Phase?
Peak/Boom/Prosperity
What does the broken line in the figure representing the four phases of the business cycle signify?
Potential GDP or long-term growth trend
In which phase of the Business Cycle does the Contraction Phase set in?
Peak/Boom/Prosperity
Which phase of the Business Cycle signifies a period of slowing growth and even failing growth?
Contraction/Recession/Downswing
What happens after the economy reaches the Peak phase in the Business Cycle?
The economy enters a depression phase.
What differentiates the Trough phase from other phases of the Business Cycle?
The lowest level of production and employment.
What follows a period of prosperity in the Business Cycle?
Contraction Phase
What is one distinct characteristic of a business cycle that differentiates it from linear growth trends?
Irregular intervals between phases.
Learn about the periodic fluctuations in economic activity, measured by changes in Real GDP. Explore the patterns of economic growth, slowing growth, failing growth, prosperity, and downturns that make up the business cycle.
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