Terms in this set (12)
Period of macroeconomic expansion followed by a period of macroeconomic contraction
What is the typical business cycle?
Period of economic growth as measured by a rise in real GDP
Steady long-term increase in real GDP
When real GDP stops rising
Economic decline marked by falling real GDP
prolonged economic contraction
Recession long and severe
Decline in real GDP (output) combined with a rise in the price level (inflation)
What Keeps a Business Cycle Going?
1) Business Investment
2) Interest rates and credit
3) Consumer Expectations
4) External Shocks
Key Economic variables that economists use to predict a new phase of a business cycle