Understanding the Business Cycle

What is the business cycle?

• A chart that shows how prices rise

• A pattern of the economy growing and slowing down

• A list of all businesses in a country

• the amount of people not working

When the economy is growing and doing well, this stage of the business cycle is called:

• Contraction

• Expansion

• Unemployment

• Depression

What happens during a recession?

• People spend more money

• Businesses hire more workers

• The economy slows down and unemployment increases

• Everything costs more money

What does GDP measure?

• How many stores a country has

• the total value of all final goods and services produced within a country in a year

• How many people lose their jobs

• The number of all things made in a country

If a country's GDP is rising, it usually means:

• The economy is getting stronger

• People are losing jobs

• Businesses are closing

• People are struggling

Unemployment means:

• People don't want to work

• Everyone is working 2 jobs

• People that want a job cannot find one

• Companies are paying less

High unemployment usually means:

• The economy is doing very well

• Lots of people are flying to a vacation spot

• Many people cannot find work

• People are making big purchases

Inflation means:

• Prices are going up

• Prices are going down

• Prices stay the same

• Business stop selling goods

Which is an example of inflation?

• A candy bar that used to cost $1.00 now costs $2.50

• The price of a game stays the same for years

• A company hires more workers

• Buying items that are 2 for the price of 1

If inflation is very high, it can cause:

• People's money to buy less

• Everything to stay the same

• Unemployment to disappear

• people to spend more money