The Business Cycle Extra Credit

What is the term given when the economy is growing?

• • Expansion (recovery) 

• • Trough (depression) 

• • Contraction (recession) 

• • Peak (prosperity) 

What two components are used to measure the business cycle?

• Real GDP and Time

• Inflation and Unemployment

• Consumer Behavior and Productivity

• Peaks and Troughs

What is the term for a period when Real GDP increases over time, indicating the economy is growing?

• Contraction

• Trough

• Expansion

• Peak

What is the name given to the highest point of economic growth in the cycle?

• • Contraction (recession) 

• • Expansion (recovery) 

• • Peak (prosperity) 

• • Trough (depression) 

What is the name given to the time period when the economy shrinks?

• • Contraction (recession) 

• • Expansion (recovery)

• • Trough (depression) 

• • Peak (prosperity) 

What are unpredictable events like wars, financial panics, or natural disasters that can cause sudden, abnormal changes in the economy?

• Static Effects

• Cyclical Changes

• Shocks

• Growth Trend Line deviations

Would you consider the COVID-19 pandemic to be an example of an economic shock? Why or why not?

Which economic issue might present itself during the expansion phase of the business cycle?

• • Stagnant economic growth

• Unemployment

• Inflation

• A recession

True or False - One business cycle is considered to be one peak, one trough and one peak

• True

• False

How is an economic recession typically classified?

• A severe and prolonged period of high unemployment and deep contraction.

• Two straight fiscal quarters of Real GDP contraction.

• A period of excessive inflation.

• When the economy experiences excessive unemployment.