The Business Cycle Flashcards
What is the business cycle?
Recurring fluctuations in the country’s economic activity
What is gross domestic product (GDP)?
The total amount of money that is generated by producing and selling finished goods by a country over a long period of time
How often is the health of the country’s economy measured?
Every three months
What is the government department that measures GDP called?
Office for National Statistics
Define the term ‘recession’.
When the country has two consecutive quarters of negative GDP
What happens during a recession?
Demand for buying goods or services falls
Businesses’ income falls
More people are made redundant
Businesses won’t expand and might disappear
Higher unemployment
Define the term ‘expansion’.
When the country has two consecutive quarters of positive GDP
What happens during an expansion?
Income and output start to rise
Lower unemployment
Consumption and investment gradually increase
Economy starts to expand
Define the term ‘trough’.
The worst bit of the recession
Define the term ‘peak’.
The top part of the expansion
Define the term ‘inflation’.
The rate that prices increase by
