Name:___________________________

The Amazing Business Cycle

We have been learning about GDP over the course of the last week, now
we are going to learn about the cycle businesses tend to follow as a result
of our national income.
The Business Cycle:








Stages of the Business Cycle
Peak:





Contractionary (Recession):





Trough:





Expansion (Recovery):








Contraction and Trough Phases:


Expansion and Peak Phases:



Reasons for the Business Cycle
Forecasting Difficulties: economic forecasting is very inaccurate - economic indicators (GDP,
Unemployment Rate, CPI, etc.) do not always tell the complete story
Political Considerations: politicians often act or fail to act, due to fear of consequences from the
public (tax rates, programs, government spending, etc.)
Reasons for the Business Cycle
Variable Effectiveness: Monetary Policy & Fiscal Policy are not always reliable or consistent in
helping to regulate the business cycle
External Factors: foreign economic conditions and activities will have an effect on the domestic
economy (sometimes a very drastic effect)