The Business Cycle
SSEMA1 Illustrate the means by which economic activity is measured.
f. Define the stages of the business cycle, including: peak, contraction, trough, recovery/expansion as well as recession and depression.
f. Define the stages of the business cycle, including: peak, contraction, trough, recovery/expansion as well as recession and depression.
The business cycle is an economic model illustrating how economic activity fluctuates over time. The y-axis in the model is Real GDP and the x-axis is Time. The x-axis values are usually months, quarters, or years. The business cycle graph looks a graph of waves from the field of Physics. The graph shows a period of rising Real GDP reaching a high point and then falling until reaching a low. After the lowest point, Real GDP recovers and begins to rise again. The whole cycle repeats itself. The graph below shows the business cycle model. The graph that follows the model shows real data about the U.S. economy.
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