11.1: Business Cycle Phases

Question 1

· Classical cycle - refers to … in the level of economic activity when measured by … in volume terms.

Answer 1

Classical cycle - refers to fluctuations in the level of economic activity when measured by GDP in volume terms.

**Rarely used

Question 2

· Growth cycle - refers to fluctuations in … …. around the long-term potential trend growth level, focusing on how much … … … is … or … trend growth in economic activity.

Answer 2

Growth cycle - refers to fluctuations in economic activity around the long-term potential trend growth level, focusing on how much actual economic activity is below or above trend growth in economic activity.

Question 3

· Growth rate cycle - refers to … in the growth rate of … …

Answer 3

Growth rate cycle - refers to fluctuations in the growth rate of economic activity.

Question 4

Four Phases of the Cycle:

Answer 4

1. Recovery
2. Expansion
3. Slowdown
4. Contraction