The Business Cycle
Name the four phases of the business cycle.
Recession, Depression, Recovery, Peak
In this system, the government makes all major economic decisions.
Command Economy
This phase is when the economy is growing after a downturn.
Recovery
During a recession, what happens to spending and unemployment?
Spending decreases, unemployment rises.
In this system, businesses are privately owned and the market determines prices
Market Economy
This is the highest point of economic activity before a downturn.
Peak
The total monetary value of all goods and services produced within a country’s borders during a specific time.
GDP (Gross Domestic Product)
In a mixed economy, who makes decisions?
Both businesses and the government.
This measures the percentage of people looking for jobs but unable to find one.
Unemployment Rate
If GDP decreases for two consecutive quarters, what phase of the business cycle is the economy in?
Recession
This type of economy allows individuals to make most economic decisions, not the government.
Market Economy
This measures how fast prices are rising.
Inflation
During a depression, describe the trends for GDP, unemployment, and consumer spending.
GDP falls a lot, unemployment rises to high numbers, and consumer spending drops very low.
This system is most common today and blends government involvement with free markets.
Mixed Economy
When inflation goes up, buying power goes...
Down