Objective 1

Question 1

Business Cycle

Answer 1

Recurring increases and decreases in the level of economic activity over periods of time.

Question 2

Expansion

Answer 2

A generalize rate of positive economic growth (GDP). The range between the trough and peak of the business cycle.

Question 3

Contraction

Answer 3

A generalized rate of negative economic growth (GDP). The range between the peak and trough of the business cycle.

Question 4

Peak

Answer 4

The highest point of output in the business cycle in which an expansion turns to a contraction.

Question 5

Trough

Answer 5

The low point of negative output in the business cycle in which an contraction turns to an expansion.

Question 6

Potential output

Answer 6

The maximum sustainable real output of an economy. An economy that is fully employed.

Question 7

National Bureau of Economic Research (NBER)

Answer 7

A private, nonprofit, organization dedicated to providing nonpartisan research on how the economy works. The Business Dating Committee of the NBER is the official arbiter of the beginning and end of recessions and expansions.