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Business Cycle

Peak: temp. max output and full emp.
Recession: dec. in output, income, emp, and trade
Trough: bottom of recession
Recovery: output and emp. expand towards full emp.

Causes of Business Cycle

-irregular innovation triggering Ig or C
-level of aggregate spending (rGDP, or AD)
-wars or expansion of money supple

Non- cyclical Fluctuations

-seasonal variations (tourism, farmers, etc)
-housing, secular trends

Cyclical Fluctuations

-durable goods and construction experience largest impact by cyclical fluctuations because these purchased can be postponed

Frictional Unemployment

have skills but trying to find a new job

Structural Unemployment

change in skills demand leaves you lacking those skills

Cyclical Unemployment

because of a recession

Labor Force

NOT included: under age 16, institutionalized
ARE included: over 16, willing and able to work

Unemployment Rate

-percentage of labor force not employed
- (Unemployed / labor force) x 100

-employed = part time workers
-not employed= discouraged workers (not seeking work)

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