Chapter 22 Flashcards
1
Q
Business Cycles
A
Fluctuations in total national output, income and employment, lasting for 2-10 years. Marked by widespread contraction or expansion.
2
Q
Features of Business Cycle
A
Investment, consumption, housing, employment and business profits fall.
3
Q
Exogenous Theories
A
State that sources of the fluctuations in economic activity are factors outside the economic system. (e.g. wars, revolution, technological innovations,…)
4
Q
Internal Theories
A
State that fluctuations in economic activity are caused by factors within the economy.
5
Q
Multiplier Model
A
Macroeconomic theory that explains how output is determined in the short run. Means that each dollar change in expenditures (investment) leads to more than a dollar change in GDP.
