Macro - Trade (Business) Cycle

Question 1

Trade (business) cycle

Answer 1

The trade/business cycle demonstrates the recurring trends in economic growth that economies often experience. A boom usually results in a slowdown, which is then followed by a recession, after this the economy goes into the recovery stage and then eventually back into a boom.

Question 2

What are the characteristics of a boom

Answer 2

High Rates of Economic Growth.

Low Rates of Unemployment

Demand-pull Inflationary Pressures.

High consumer and business confidence.

Improving government budget balance.

Question 3

What are the characteristics of a recession

Answer 3

Negative Rates of Economic Growth

High rates of Unemployment

Worsening government budget balance.

Lower confidence for businesses and consumers.