Unit 3: Intro to Macroeconomics

Question 1

Macroeconomics:

Answer 1

The branch of economics that studies the behaviour and performance of an economy as a whole
It looks at the aggregate (total combined) changes in the economy
Example: looks at unemployment rate for the country, rather than the impact of unemployment on a single family

Question 2

Recovery/Expansion:

Answer 2

A period of time when the level of business activity surges and gross domestic product (GDP) expands until it reaches a peak.
phase of the business cycle when an economy moves from a trough to a peak
prices rise; unemployment falls

Question 2

Peak:

Answer 2

The highest point between the end of an economic expansion and the start of a contraction in a business cycle.
Low unemployment and rising prices
Also known as prosperity

Question 3

Trough:

Answer 3

The low turning point or a local minimum of a business cycle.
Prices are falling; unemployment rate is at its highest
Also known as depression

Question 3

Recession:

Answer 3

A period of time when the level of business activity slows and GDP shrinks until it reaches a trough
phase of the business cycle when the economy moves from peak to trough
prices are falling; unemployment is rising