Chapter 1 Flashcards
1
Q
What is a contraction?
A
The phase of the economic cycle when real GDP falls.
2
Q
What is an expansion?
A
The phase of the economic cycle when levels of employment and production are high and the economy is growing.
3
Q
What is inflation?
A
A state of the economy in which the general price level is increasing.
4
Q
What is a peak in the economic cycle (GDP)?
A
The phase of the economic cycle when an expansion ends and a contraction begins.
5
Q
What is a trough in the economic cycle (GDP)?
A
The phase of the economic cycle when a contraction ends and an expansion begins.
