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Chemistry G10 > Business Cycle > Flashcards

Business Cycle Flashcards

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1
Q

Describe a Business Cycle

A

Series of upward and downward movements in the level of economic activity of a country over a period of months or years

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2
Q

What are the two periods of business cycles

A

Expansion - Economic Activity increasing - Recovery and Prosperity
Contraction - Economy is falling - Recession and Despression

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3
Q

What are the two turning points of a business cycle

A

Trough - End of recession or depression

Peak - Upper turning point of a cycle - After a peak, economic activity decreases

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4
Q

What are the 4 phases of a business cycle

A

Recovery
Prosperity
Recession
Depression

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5
Q

How are business cycles measured

A

From Peak to Peak and Trough to Trough

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6
Q

What are the characteristics of a Recession

A

Negative economic growth rate for 2 consecutive quarters
Businesses reduce output
Reduction in income
Increase in unemployment rate

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7
Q

What are the characteristics of a Depression

A

A recession that has continued for a long time
Severe form of a recession
Large scale unemployment and severe shortages of goods and services

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8
Q

What are the characteristics of a Recovery

A

Economy starts to grow again
Starts slowly and speeds up over time
Gradual increase in demand and increase in output

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9
Q

What are the characteristics of a Prosperity

A

Increase in economic activity in a country
Increase in output, employment rate and wages
Standard of living improves
Official when an economy has grown for six consecutive months
Ends at a peak

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10
Q

What are the 5 ways of measuring a business cycle

A 
The Dating System
The Gross Domestic Product
The Employment Growth Rate
The Inflation Rate
The Production Of Certain Goods And Services
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11
Q

What is the Dating System

A

Statistics recorded on a daily, weekly and monthly basis and then compiled quarterly

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12
Q

What is the GDP

A

Measure of the state of the economy

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13
Q

What is the employment growth rate

A

Figures compiled to show how many people are employed in the country and if there are changes in the number employed

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14
Q

What is the inflation rate

A

Figures for inflation rate are compiled by the SARB and show changes in prices. Gives an indication of where we are on the business cycle

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15
Q

What is the production of certain goods and services

A

Certain figures such as numbers of new buildings or amount of gold mined and gives an indication of where we are on the business cycle

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16
Q

What are the 3 business cycle indicators

A

Leading Indicators
Lagging Indicators
Coincident Indicators

17
Q

What are Leading Indicators

A

Change direction before the economy itself changes

Used to predict what is going to happen to the economy

18
Q

What are Lagging Indicators

A

Change a few months after the economy changes
Confirm the economy has changed
Example - Unemployment Rate

19
Q

What are Coincident Indicators

A

Change at the same time as the economy
Give information about the state of the economy
Example - Company payrolls because wages and salaries increase when the economy is strong and decrease when the economy is weak

20
Q

What are the two types of reasons for business cycles

A

Exogenous and Endogenous reasons

21
Q

What are exogenous reasons

A

Causes that originate outside of the economy of a country

22
Q

What are the 5 types of exogenous reasons

A 
Natural Disasters
Political Reasons
Foreign Trade
Weather
Monetary Reasons
23
Q

What are endogenous reasons

A

Causes that originate inside of the economy

24
Q

What are the 3 types of endogenous reasons

A

Investment
Technological Change And Innovation
Savings

25
Q

What are the 6 effects of business cycles

A

Changes in aggregate supply and demand
Changes in economic growth
Changes in employment rate
Changes in price / inflation rate
Changes in the level of the rate of exchange
Effects on people who are economically vulnerable

Chemistry G10 (10 decks)

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