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CHANGE UNIT

Current Unit: UNIT 8 - BASIC ECONOMIC CONCEPTS

Table of Contents

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BUSINESS CYCLES

• Expansion
  • Business activity is expanding
  • Increasing consumer demand for goods and services
  • Interest rates are rising
  • Increasing industrial production
  • Rising stock markets
  • Rising property values
  • Inventories reducing or declining(consumers are spending)
  • Decreasing unemployment
  • Also called Recovery
• Peak
  • From Expansion to Peak; CPI increases and consumer demand is up
  • Business is entering their maximum production of goods

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• Contraction
  • Interest rates are declining
  • Inventories are increasing
  • Inverted Yield Curves
  • Declining economic output
  • Decreasing inflationary pressure
  • Increasing unemployment
• Trough
  • Low rate of inflation
  • High rate of unemployment
  • Businesses operating at the lowest capacity levels

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INDUSTRY TYPES