The business cycle

Definition of the business cycle

The business cycle refers to the fluctuations in economic activity over time, moving through phases of expansion and contraction

Define a Boom

A boom is a peak in the cycle with very high economic activity, low unemployment and inflation risk

Define a recession

A recession is two conseccutive quaters of negative GDP

Define depression

A depression is a prolonged sever downturn in economic growth activity, with high unemployment and falling GDP for years

What are the characteristics of Expansion

characterestics of expansion include rising of GDP and increased consumer confidence, employment, and investment

What are the characteristics of contraction

characteristics of contraction include the slowing of GDP growth, rise of unemployment and decreased consumer confidence and spending

Define leading economic indicators

Leading economic indicators predict future economic activity, like building aprovals and stock market trends

Define Lagging economic indicators

Lagging economic indicators shows the changes after the economy has shifted, such as unemployment rates and interest rates

Define Coincidient economic indicators

Coincident economic indicators change at the same time as the economy, such as reatil sails, personal income, and industrial production