Week 6 Flashcards
(16 cards)
Business cycle definition
The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles are generally measured using rise and fall in real – inflation-adjusted – gross domestic product (GDP), which includes output from the household and nonprofit sector and the government sector, as well as business output. “Output cycle” is therefore a better description of what is measured. The business or output cycle should not be confused with market cycles, measured using broad stock market indices; or the debt cycle, referring to the rise and fall in household and government debt.
Output gap definition
Business cycle vocabulary
Duration definition
number of quarter from peak to trough in a recession or from trough to the next peak in an expansion.
Amplitude definition
the % change in real GDP from peak to trough in a recession, or from trough to the next peak in an expansion.
Comovements
Business cycle and employment
Output gap and unemployment: Okun’s law
Business cycle facts I
Business cycle facts II
Leading indicators definition
Indicators that have predictive power for business cycle turning points and phases.
Co-incident indicators definition
Indicators that have predictive power for current state of the economy.
What is aggregate demand?
What is aggregate supply?
Aggregate supply shocks
Business cycles last around __ years.
6-10
