(1-21-16) Business Cycles

Business Cycles

Peak-Highest point of real GDP -has the lowest unemployment and the greatest spending

Expansion-(recover phase) real GDP is increasing -causes spending to increase and unemployment to decrease

Contraction-(Recession) real GDP declines for six months -increase in unemployment reduction in spending

Trough- Lowest point of real GDP -highest unemployment and least amount of spending

-1 cycle occurs from trough to trough

-Cycles average from 5 to 7 years

-Recessions last approximently 14 months

-Peaks and Trough's are meaningless as we never know that we are in one until it is over.