6.3 The Normal Business Cycle

A point where prices and incomes have reached their highest point and GDP stops expanding

• Trough

• Recession

• Peak

• Recovery

A period of economic growth as measured by a rise in real GDP

• Recession

• Stagnation

• Expansion

• Depression

A period of economic decline marked by falling real GDP

• Expansion

• Contraction

• Recession

• Inflation

A major event that occurs without warning and leads to a major shortage or surplus

• External shock

• Market fluctuation

• Economic downturn

• Supply chain disruption

Alternating periods of economic expansion and economic recession

• Business cycle

• Economic growth

• Market fluctuation

• Financial instability

Income distributed unevenly in a population

• Income equality

• Income inequality

• Income distribution

• Income disparity

A drop in GDP occurring over a period of more than 6 months

• Recession

• Depression

• Stagnation

• Inflation

The lowest level of economic performance and is represented by the lowest point on the economic growth curve.

• Peak

• Trough

• Recession

• Expansion

A drop in GDP for 8 consecutive quarters (2 years), characterized by business failures, low production, and high unemployment

• Economic recession

• Economic depression

• Economic stagnation

• Economic recovery