Economic (suite)

Question 1

How do we
measure how the
economy is
doing?

Answer 1

GDP Annual Growth Rate
GDP per Capita
Unemployment or Employment Rate
Consumer Price Index (inflation)
Balance of Trade (exports - imports)
Industrial Production
Retail Sales
Exchange Rate for Canadian Dollar
Consumer/Business Confidence

Question 2

What is a GDP?

Answer 2

• A broad measurement of a nation’s overall
  economic activity – the godfather of the
  indicator world!
• Defined as the monetary value of all the finished goods and services produced within a
  country’s borders in a specific time period

Question 3

What is the business cycle?

Answer 3

The business cycle is the periodic but
irregular pattern of ups and downs in
total economic production

Question 4

What is a recession ?

Answer 4

two quarters of GDP
decline: A recession is defined as two or
more consecutive quarters (a quarter is three
months) of decline in the GDP

Question 5

What is a depression?

Answer 5

severe, long-lasting
recession: A depression is defined as a
particularly severe and long-lasting recession,
accompanied by falling prices (deflation).

Question 6

The Four Phases of the Business Cycle

Answer 6

1. Expansion: Pace of Economic Activity Speeds Up.
2. Peak: Economic Activity Hits Its High.
3. Contraction: Pace of Economic Activity Slows Down.
4. Trough: Economic Activity Hits Bottom.