1. Business Cycles ~What are the four phases of the business cycle?
~What are the four factors influence the business cycle?

2. Phases of the Business Cycle
Business cycles are fluctuations, or changes in the market systems economic activity
Expansion- period of economic expansion and growth
EX:
Peak- high point of economic expansion
Contraction/ Recession- real GDP stops increasing and BC enters a slow down period
Depression- sever Recession (1930’s)
Trough- occurs when demand, production, and employment reach their lowest levels
After economy enters into recovery

3. Phases of the Business Cycle

4. Influences on the Business Cycle
Business Investment- invest in capital goods (new Machinery)
Low Investment Rate = Low Expansion
Money and Credit
Amount of money in circulation depends on government policies
People and Businesses must barrow money to make purchases/ interest rates effect that P. Power
Public Expectations
Recessions and prosperous
External Factors
Political, world economics, and war

5. Predicting the Business Cycle
Leading Indicators
Anticipate the direction in which the economy is headed
Changes in the # of building permits
Orders for new capital and consumer goods
Price of raw material
Coincident Indicators
Change in the economy as it moves from one phase to another of the Business Cycle and tell the upturn and downturn in the economy
Personal income
Sales volume
Industrial production levels
Lagging Indicators
Change months after an upturn of downturn in the economy has begun and help and help predict the duration of that economic situation
Use of consumer credit
# and size of business incomes

7. Questions
What are three signs that the business cycle is entering a period of expansion?
What are three signs that the business cycle is entering a period of recession?
List the 4 factors that influence the business cycle.
List and describe the 3 types of economic indicators that economists use to determine the current phase of the business cycle and where the economy is headed.