Understanding the Business Cycle

Front

What is the first stage of the business cycle?

Back

Economic expansion

Front

What happens during an economic expansion?

Back

More goods and services are produced

Front

What is the point just before the downward movement begins in the business cycle?

Back

Peak

Front

What is economic contraction?

Back

A period when economic output declines.

Front

What can happen during a recession?

Back

Long-lasting effects on individuals

Front

How does the National Bureau of Economic Research (NBER) define a recession?

Back

A significant decline in economic activity that lasts more than a few months

Front

What are some possible causes of recessions? Positive economic shocks, Stable monetary policies, Increased consumer spending, Financial market disruptions

Back

Financial market disruptions

Front

What is the typical pattern of a recession?

Back

Rising unemployment and falling profits

Front

How does the NBER determine the start and end of a recession? Options: By analyzing real GDP growth, By considering multiple economic indicators, By using a fixed timing rule, By relying on forward-looking data

Back

By considering multiple economic indicators

Front

What happens after a recession ends?

Back

The economy enters a period of economic expansion