Economic Cycle

Question 1

What does the economic cycle graph show (Real GDP and growth)

Answer 1

shows a real GDP line vs the average rate of growth

Question 2

what are the x and y axis labelled with for the economic cycle graph

Answer 2

y = real GDP
x = time

Question 3

When the real gdp is up to the left of the average rate of growth what is being depicted (2 possible)

Answer 3

a boom - where there is high levels of unsustainable growth
or if it is rising
an up-turn: where GDP is rising from -ve to +ve

Question 4

What are the characteristics for the macro - economic objectives during a boom

Answer 4

low unemployment
potentially high inflation
import spendings high

Question 5

When real GDP is below the average rate of growth what is being depicted (2 possible)

Answer 5

a recession - negative growth for 6 consecutive months
a down-turn - where GDP is deflating (below 100)

Question 6

what type of unemployment links to the economic cycle

Answer 6

cyclical unemployment