1. Standard
SSEMA1e- Define and label stages of the business cycle.

2. Business Cycles in the United States
We interpret economic growth with business cycles.
There are two phases to the business cycle.
Which phase is this?

3. Phases of the business cycles
Expansion- growing business activity and increasing GDP
Contraction- Two consecutive quarters of declining GDP

4. Expansion
Peak- The highest point between the end of an economic expansion and the start of a contraction
GDP is at it’s highest level

5. Characteristics of the business cycle
Expansion
GDP
Unemployment
Aggregate Demand
( High Wages)
Aggregate Supply (production)

6. Contraction
Trough- Marks the end of a period of declining business activity and the transition to expansion.
GDP is at its lowest level

7. Characteristics of the business cyles
Contraction
GDP
Unemployment
Aggregate Demand
(consumers spend less and unemployed workers have little to no wage)
Aggregate Supply
(businesses produce less b/c of lower profits)

8. Recession
Two consecutive quarters of negative GDP

9. Depression A depression occurs when a recession becomes severe.
This is a state of the economy with large numbers of unemployed, acute shortages, and excess capacity in manufacturing plants.