2.5.3 Trade (business) cycle

Question 1

Boom

Answer 1

A period of rapid economic expansion resulting in higher GDP, lower unemployment, rising inflation rate and rising asset prices

Question 2

Depression

Answer 2

Used to describe a severe recession which may become a prolonged downtown and where a nations real GDP falls by at least 10%

Question 3

Double dip recession

Answer 3

When an economy goes into recession twice without a full recovery in between

Question 4

Expectations

Answer 4

How we expect the future to unfold

Question 5

Forecast

Answer 5

A prediction made about the likely future performance of an economy

Question 6

Hysterisis

Answer 6

when a sustained period of low aggregate demand can lead to permanent damage to the supply side of the economy

Question 7

Peak

Answer 7

The highpoint of the economic cycle beyond which a recession starts

Question 8

Recession

Answer 8

A period of at least six months were real GDP declines

Question 9

Recovery

Answer 9

A phase of the economic cycle, after a recession/depression, during which real GDP starts to increase and unemployment begins to fall

Question 10

Economic shocks

Answer 10

An unexpected or an unpredictable event that affects the economy

Question 11

Slowdown

Answer 11

A fall in the rate of growth of an economy, but not a full scale recession

Question 12

Slump

Answer 12

a sustained decrease in real GDP and a persistent rise in unemployment

Question 13

Soft landing

Answer 13

is slowdown an economic activity but does not result in a recession.

Question 14

Trade cycle

Answer 14

refers to fluctuations in economic activities specifically in employment, output and income, prices, profits etc.

Question 15

Trough

Answer 15

The low point of the economic cycle beyond which a recovery starts