Economic Models and Responses Flashcards
1
Q
What is GDP?
A
The value of all finished goods and services produced within a country during a period of time.
2
Q
What happens at a BUST/TROUGH in the economic cycle?
A
Low AD (spending)
Low output
Low prices
High unemployment
3
Q
What happens at a BOOM/PEAK in the economic cycle?
A
High AD (spending)
High output
High prices
Low unemployment
4
Q
If Leakages are greater than Injections?
A
The economy contracts.
5
Q
If Injections are greater than Leakages?
A
The economy expands.
6
Q
What is 2 consecutive busts/troughs in the economic cycle called?
A
Recession.
7
Q
What is 3 consecutive busts/troughs in the economic cycle called?
A
Depression.
