Levels
of business cycles
9-4.2. Expansion: The phase of
the business cycle when the economy moves from a trough to a
peak.
9-4.2.1. Boom :A period of
time during which sales or businessactivity increases rapidly.
9-4.2.2. Recovery: The phase of the businesscycle when
the economy moves from a trough to a peak. It is a period when business
activity rises and gross domestic product expands until it reaches a
peak.
9-5. Levels of business cycles:
9-5.1. Peak: The highest point
between the end of an economic expansion and the start of a contraction in a
business cycle. The peak of the cycle refers to the last month before
several key economic indicators, such as employment and new housing starts,
begin to fall. It is at this point that real GDP spending in an economy is
its highest level.
9-5.2. Trough: The stage of
the economy s business cycle that marks the end of a period of declining
business activity and the transition to expansion.
9-6. The duration of business
cycles:Since the Second World War, most business cycles have lasted three to
five years from peak to peak. The average duration of an expansion is 44.8
months and the average duration of a recession is 11 months. As a comparison,
the Great Depression - which saw a decline in economicactivity from 1929 to 1933 - lasted 43 months from peak to trough.
But
after 1970s the duration of business cycles became less, most business cycles
have lasted three to five months from peak to peak.
Question:
1. What does business cycle mean?
2. Draw a graph that explains business
cycle phases?
3. List The main types of business cycles?
4. Give the
definition of following concepts:
a. Recession.
b. Depression.
c. boom.
d. recovery.
5. Make
comparison between contraction and expansion?
6. Translate
the following paragraph:-
National Bureau of Economic
Research
The Business Cycle Dating Committee
of the National Bureau of Economic Research met every one month. At its last
meeting, the committee determined that a trough in business activity occurred
in the U.S. economy in November 2001. The trough marks the end of the
recession that began in March 2001 and the beginning of an expansion. The
recession lasted 8 months, which is slightly less than average for recessions
since World War II.
In determining that a trough
occurred in November 2001, the committee did not conclude that economic
conditions since that month have been favorable or that the economy has
returned to operating at normal capacity. Rather, the committee determined only
that the recession ended and a recovery began in that month.