The Business Cycle Flashcards
1
Q
Indicators of the boom phase of the business cycle
A
High growth rates
high national income
consumption increases
private indebtness increases
confidence levels are high
interest rates are high
savings ratio increases
investment levels high
budget swings to surplus
trade balance deteriorates
Full employment
wage growth high
demand pull inflation occurs
2
Q
The causes of the business cycle
A
Investment cycle
External Shocks
Government policy
the stock (inventory) cycle
3
Q
Examples of coincident indicators:
A
- Investment $186523 million AUD was spent on investment in Australia in 2017
- CAD
- Economic Growth
4
Q
Examples of lagging indicators:
A
- Unemployment 5.6% currently
- Participation rate average of 9.87% from 1959-2017
- Employment growth
- Interest rates
5
Q
Examples of leading indicators:
A
- Dwelling approvals
- Investment intentions
- Business/ consumer confidence
