1. Economic Cycle Ups and Downs in the economy that occur repeatedly.

2. Words to know Recession: a relatively mild, widespread decline in business, trade and employment. Depression: A deep, long-lasting decline in business, trade and employment. Contraction: A period of general economic decline. Contractions are often part of a business cycle, coming after an expansionary phase and before a recession. Expansion: Growth, as in an economic recovery. Boom: A period of rapid economic expansion. Recovery: A period in a business cycle following a recession, during which the GDP rises. Gross Domestic Product: (GDP): The total market value of all final goods and services produced in a country in a given year

3. Economic Cycle Growth/expansion contraction recession depression recovery

4. The ups and downs of a capitalist economy may be illustrated by the business cycle. During the “Great Depression” businesses closed, banks failed, GDP declined, prices went down, profits disappeared and unemployment increased! From the boom of the 1920s to the depression of the 1930s to the recovery by 1942, this illustrates the “economic cycle” of the Great Depression Era.

6. Negative Patterns of Economic Cycle Increase in unemployment Decrease of price level Excess inventory Decrease of production Repossession Increase of business failure bankruptcy