PDF Notes: NOTES Business Cycles

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    What defines a business cycle?

    It consists of alternating periods of economic expansion and contraction.

    What happens during a depression phase?

    Economic activity sharply declines, leading to low production and high unemployment.

    How does recovery differ from depression?

    Recovery marks the beginning of economic improvement after a decline.

    What characterizes the boom phase?

    Economic activity peaks with high production, employment, and consumer confidence.

    What occurs during a recession?

    Economic activity declines after reaching a peak, leading to reduced demand and profits.

    What is the cyclical nature of business cycles?

    They repeat a pattern of expansion followed by contraction.

    What are the main phases of a business cycle?

    Prosperity, recession, depression, and recovery.

    How do business cycles exhibit wave-like fluctuations?

    Economic variables rise and fall together in a systematic pattern.

    Why are business cycles not periodic?

    They recur at irregular intervals without fixed durations.

    What is meant by economy-wide phenomenon in business cycles?

    They affect the entire economy, not just specific sectors.

    What is synchronized movement in business cycles?

    Economic variables tend to rise or fall together during cycles.

    Why do phases of a business cycle have unequal durations?

    Recovery takes time, while prosperity can end suddenly.

    What is the international character of business cycles?

    They are influenced by global trade and economic conditions.