2.5.3: Trade (Business) Cycle

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Created by
Kendrick Lamar

Cards (5)

  • Trade cycle: Periodic up/down fluctuations in real GDP and other macroeconomic factors
  • 4 stages of trade cycle
    Boom (Peak of growth)
    Recession (Growth decreasing)
    Slump (Growth at its lowest point)
    Recovery (Growth increasing)
  • Characteristics of Boom
    Positive output gap
    High national income
    High consumption and investment
    High imports
    Rising inflation
    Rising wages
  • Characteristics of recession
    High unemployment
    Low consumption and investment
    Low inflation
    Low wages
    Low imports
  • A recession is defined as a period of 2 or more consecutive quarters where real GDP has fallen