The Business Cycle Flashcards
What is the business cycle?
The business cycle is recurring fluctuations in the country’s economic activity.
What is gross domestic product (GDP)?
Gross domestic product is 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’.
Recession is 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’.
Trough is the worst bit of the recession.
Define the term ‘peak’.
Peak is the top part of the expansion.
Define the term ‘inflation’.
Inflation is the rate that prices increase by.
