Business Cycle
The movement of the economy from one condition to the other and back again
The Business Cycle
When the drop in related businesses occur. ie) people buy fewer cars, those who make car parts may lose their job.
An increase in the general level of prices. Buying power decreases. Harmful for those with fixed incomes.
Inflation
Decrease in the general level of prices and occurs during periods of recession and depression
Deflation
The yield on long term U.S. government debt obligations of up to 30 years
Treasury Bond
Prosperity, Recession, Depression, and Recovery
The four phases of the business cycle
GDP falls rapidly during this time, we haven't faced one in more than 70 years
Depression
When the demand for goods and services is greater than the supply
A cause of inflation
This is what represents the cost of borrowing, lending, investments
Interest rates
The amount individuals pay to borrow for the purchase of a new home.
Mortgage Rate
This is the peak of the business cycle where people who want to work do, goods are produced in record numbers and the GDP is growing, although this does not go on forever
During this, 25 percent of labor force was unemployed, many people could not afford to satisfy their basic needs
Great Depression
This type of inflation can stimulate the economy, it's where wages rise faster than the price of products.
Mild Inflation
The rate banks make available to their best business customers, like large corporations.
Prime Rate
The cost of borrowing for large U.S. corporations
Corporate bond rate
When the economy slows down and demand decreases, less production, unemployment increases and GDP growth slows for 2 quarter of a year
Recession
A phase when unemployment begins to decrease and GDP begins to rise.
Recovery
This way of measuring inflation compares prices in one year with prices in an earlier year.
Price Index
The rate financial institutions are charged to borrow funds from the Federal Reserve banks
Discount Rate
The rate for time deposits at savings institutions
Certificate of deposit
When recession worsens and spreads throughout the entire economy resulting in a long period of unemployment, weak consumer sales and business failures.
Depression
During this time, consumers are more confident about their futures and begin buying again, it's when the nation moves back into prosperity.
Recovery
Buying power decreases during this time? ie) 5% increase in cost from 2024-2024. A $100 item costs $105
Inflation
T-bill rate
The major influence on the level of interest rates
The Supply and Demand for money