Business Cycles

Stages of the Business Cycle

100

The highest point of real GDP.

What is the peak?

200

The lowest point in the trend line. Also referred to as the "turn around" point.

What is trough?

300

When real GDP declines for two quarters in a row. (6 months)

What is recession?

400

A state where a large number of people are out of work and there are acute shortages.

What is depression?

500

The period of recovery from recession.

What is expansion?

Causes of the Business Cycle

100

True or False: When the economy is expanding, businesses invest highly in capital goods.

What is true?

200

True or False: Businesses cut back or gain their business inventories during a recession or depression.

What is true?

300

A new product or a new way of performing a task has entered the market.

What is innovation or technology?

400

Wars, increase in oil prices, international conflict, etc.

What is external shocks?

500

COVID caused this business cycle.

What is recession?

Predicting Business Cycles

100

A macroeconomic model that uses algebraic equations to explain the behavior of economic trends.

What is an econometric model?

200

The equation that most models used today are based off of.

What is GDP = C + I + G + (X - M)

300

A tool used to predict the turning points within the business cycle.

What is the index of leading indicators?

400

Neil Peart produced 2 albums in honor of this great drummer.

What is Buddy Rich?

500

The airport destination in Toronto, Canada. Also the name of a Rush song from Moving Pictures.

What is YYZ?