Section 6 Flashcards
1
Q
What is GDP
A
Gross Domestic Product
2
Q
Business cycle
A
The fluctuations in economic activity that an economy experiences over a period of time
3
Q
4 stages of the economic cycle
A
Growth
Boom
Recession
Slump
4
Q
Growth
A
During a period of expansion
- wages increase
- high demand of goods
- Low unemployment
5
Q
Boom
A
When the economic cycle peeks
- the economy stops growing
- GDP reaches maximum
- cycle beings to contract
6
Q
Recession
A
During a period of contraction
- banks stop lending money
- number of jobs decline
- unemployment increases
7
Q
Slump
A
When the economic cycle reaches a trough
- Economy reaches its lowest point
- stock prices drop
- prices are likely to start rising
8
Q
inflation
A
the increase in average prices of goods and services over time.
