Business Cycles, Unemployment, and Inflation

Flashcards covering key concepts, terms, and definitions related to business cycles, unemployment, and inflation.

Business Cycle

Alternating increases and decreases in economic activity over time, typically measured in months or years.

Peak

The point in the business cycle where economic conditions are at their best, characterized by high employment.

Recession

A phase of the business cycle marked by a contraction in economic activity and worsening economic conditions.

Trough

The lowest point in the business cycle, indicating very bad business conditions and high levels of unemployment.

Recovery

The phase of the business cycle following a recession, characterized by economic expansion and improvement.

Monetary Factors

Changes in the money supply by the central bank that can create inflation or deflation.

Misery Index

A measure that combines the inflation rate and the unemployment rate to indicate economic distress.

Leading Economic Index

An index that predicts recession by showing economic indicators expected to change before the economy as a whole does.

Coincident Economic Index

An index that measures current economic activity and changes in real-time.

Lagging Economic Index

An index that reflects changes in the economy after they have occurred, showing the historic trends.