three sec model and bussiness cycle

Question 1

bussiness cycle digrams

Answer 1

Business cycle diagrams include four phases — boom, slowdown, recession and recovery in economic activity.

Question 2

boom

Answer 2

Boom is a phase of the business cycle where output has reached its limit and high spending causes shortages of goods and services, leading to inflation.

Question 3

contraction

Answer 3

Contraction is a phase of the business cycle where national production or GDP levels in the economy are falling. This causes a rise in unemployment and slower inflation.

Question 4

expansion

Answer 4

Expansion is a phase on the business cycle. It is when production levels in the economy are rising, causing unemployment to fall and inflation to slowly increase.

Question 5

living standards

Answer 5

Living standards is a concept used to describe how well-off people are generally. These are affected by both material wellbeing and non-material aspects. Material living standards are dictated by our income level and the quantity of goods and services we can purchase or consume each year, while non-material living standards relate to the quality of daily life such as happiness, life expectancy, mental and physical health, crime rates, religious and political freedom, and the environment.

Question 6

recession

Answer 6

when economic activity drops, GDP shrinks, unemployment rises and incomes fall