DO NOW Please generate a list of things that go up and down. Compare your list with your neighbors. Were there any similarities?

THE BUSINESS CYCLE Business cycles are the recurring ups and downs of GDP in a country. There are four stages in the business cycle Prosperity Recession Depression Recovery

Prosperity is a period in which rate of GDP growth increases. most people who want to work are working, businesses produce goods and services in record numbers wages are good rate of GDP growth increases.

Recession is a period in which demand for goods and services begin to decrease, businesses lower production, unemployment begins to rise Recession is defined as: GDP growth slows for two consecutive quarters of the calendar year.

Recession ripple effect This phase may not be too serious or last very long, but it often signals trouble for workers in related businesses. For example, if people buy fewer cars, a number of workers who make batteries, tires, and other parts may lose their jobs. This drop in related businesses is called the ripple effect.

Depression is a phase marked by GDP falls rapidly prolonged period of high unemployment weak consumer sales many business failures. GDP falls rapidly http://education-portal.com/academy/lesson/recession-vs-depression-definitions-and-differentiation.html#lesson Depression vs. recession video

Recovery Is a phase in which GDP begins to rise again. unemployment begins to decrease, demand for goods and services increases. GDP begins to rise again.

Activity 1/Business cycles The 4 phases of the business cycle will be taped to the front board. You will be given a certain measurement and you must tape your note card under the proper business cycle on the front board. We will check each other’s work.

CONSUMER PRICES Inflation Causes of inflation Measuring inflation is an increase in the general level of prices. Causes of inflation the demand for goods and services is greater than the supply Measuring inflation Most people think inflation is harmful. Consumers have to pay higher prices for the things they buy. Therefore, as workers, they have to earn more money to maintain the same standard of living. Most harmful to people who are on a fixed income.

Consumer Prices (cont’d) Deflation Means a decrease in the general level of prices. The opposite of Inflation. Prices of products are lower, but people have less money to buy them so there is no benefit to consumers

Business cycles/Activity 2 Each row will be assigned one of the 4 phases of the business cycle as it relates to two (2) athletes, musicians, actors/actresses, sports team etc. You must include the name of the cycle, definition, a description of what was going on in the life of the person or team at that time and a picture displaying this. You will present your famous person/team to the class. My sample

INTEREST RATES Interest rates represent the cost of money Each day, the cost of money (interest) changes because of various factors. The supply and demand for money is the major influence on the level of interest rates. The lower the interest rate the more $ you can borrow. The higher the interest rate the less $ you can borrow.

Checkpoint  How do interest rates affect business activities in our economy? Interest rates can encourage or discourage borrowing and spending. Lower interest rates allow consumers greater spending power, which increases demand, productivity, and employment. Businesses often pass on the cost of higher interest rates to consumers.

Exit Question Based on what I learned today about the 4 phases of a business cycle the US economy is currently in the ______ cycle. Explain your answer.