Trade (Business) Cycle Flashcards
Boom
A period of rapid economic expansion resulting in higher GDP, lower unemployment, rising inflation rates and rising asset prices.
Depression
Used to describe a severe recession which may become a prolonged downturn and where a nation’s real GDP falls by at least 10 per cent.
Double dip recession
When an economy goes into recession twice without a full recovery in between.
Expectations
How we expect the future to unfold – necessarily affected by the degree of uncertainty.
Forecast
A prediction made about the likely future performance of an economy.
Hysteresis
When a sustained period of low aggregate demand can lead to permanent damage to the supply side of the economy, for example because of high long-term unemployment.
Peak
The high point of the economic cycle beyond which a recession starts.
Recession
A period of at least six months when real GDP decline. Or defined as a broadly-based contraction in output, employment, investment and confidence.
Recovery
A phase of the economic cycle, after a recession/depression, during which real GDP starts to increase and unemployment begins to fall.
Shocks
Unexpected events that can affect both aggregate demand and supply e.g. unexpected changes in world oil prices, currency volatility and the effects of political instability.
Slowdown
A fall in the rate of growth of an economy but not a full-scale recession.
Slump
A sustained decrease in real GDP and a persistent rise in unemployment.
Soft landing
A slowdown in economic activity but which does not result in a recession.
Trade cycle
A trade cycle refers to fluctuations in economic activities specially in employment, output and income, prices, profits etc.
Trough
The low point of the economic cycle beyond which a recovery starts.
