1. Economic Vocabulary
Hubbard 2005

2. Business Cycle
When fluctuations in economic activity between expansion and recession occur over a period of years.
“From Boom to Bust”

3. Business Cycle Post WWI

4. When things are starting to go bad in the economy
Recession
When things are starting to go bad in the economy
(short period) decrease in consumer spending and businesses cut production

5. An extended period of recession. Economic activity is very poor.
Depression
An extended period of recession. Economic activity is very poor.
“Bust”

6. Expansion
When the economy is starting to improve (rise) Typically a period of higher employment.
“Boom”

7. Trough
This is the low point in the business cycle. Prices, profits and interest rates are low.

8. Peak
When the economy is doing very well. Employment is good, profits are high.

10. A general rise in prices of goods and services.
Inflation
A general rise in prices of goods and services.

11. Decline in the purchasing power of the dollar.
Devaluation
Decline in the purchasing power of the dollar.

12. Gross National Product (GNP)
Total value of goods and services produced by a nation.
U.S. GNP in 1900 was about 8 times that of 1860
Tremendous growth.

13. Free Enterprise
Businesses are privately owned and operated with little interference from the government.

14. Laissez Faire
Allowing events to take their own course with minimal intervention.
French literally meaning Let do (“allow to do”).
No government involvement in business.