Economic Business Cycle and Consumer Protection

Question 1

What are the economic factors to understand?

Answer 1

1. interest rates- impacts investment returns and purchasing power. Both inversely related
2. Taxes - impact on redistribution of wealth.
3. Inflation - impact on goods, services and money
4. Unemployment - impact on wage rates
5. Monetary and Fiscal Policy

Question 2

Business Cycle Process:

Answer 2

Expansion, peak, recession/contraction, trough

Question 3

Effects on Inflation, interest rates, unemployment and GPD with the business cycle

Answer 3

Expansion:
Inflation - increasing, interest rates- increasing, unemployment - decrease, GDP- increase
Peak:
Inflation- H, Interest Rates- H, Unemployment -L, GDP- H
Recession:
Inflation - Decrease, Interest rate - decrease, Unemployment - increase, GDP- decrease
Trough:
Inflation- low, interest rates - low, unemployment - high, GDP- low

Question 4

Recession and Depression qualifications

Answer 4

Recession: 6 MO/2 quarters
Depression: Recession for 18MO/6 quarters

Question 5

Measures of Inflation

Answer 5

Consumer Price Index: 2-3%
Producer Price Index: measuring in manufacturing sector