Sunday, January 24, 2016

The Business Cycle


Peak: highest point of real GDP (this where you have your greatest spending and lowest unemployment) in this phase inflation is a problem
Expansion: where real GDP is increasing (spending increases and unemployment decreases) 
Contraction/ recession: where real GDP declines for six months (increasing unemployment and reduction in spending) 

Trough: lowest point of real GDP (highest unemployment and least spending) 

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