Understanding Business Cycles Stages of a Business Cycle
Understanding Business Cycles
Stages of a Business Cycle l Expansion Phase – Boom – Peak l Contraction Phase – Slowdown – Recession (2+ quarters) – Trough Green. Bizz Project Digital Safari Institute
Business Cycle: Expansion Green. Bizz Project Digital Safari Institute
Business Cycle: Peak Green. Bizz Project Digital Safari Institute
Business Cycle: Contraction Green. Bizz Project Digital Safari Institute
Business Cycle: Recession Green. Bizz Project Digital Safari Institute
Business Cycle: Trough Green. Bizz Project Digital Safari Institute
Business Cycle: Recovery Green. Bizz Project Digital Safari Institute
Business Cycle: Expansion Green. Bizz Project Digital Safari Institute
U. S. Economy: 1970 -2006 Cycles of Booms, Busts and Recessions Expansion Contraction Source: Bureau of Economic Analysis Green. Bizz Project Digital Safari Institute
U. S. Economic Recessions How Long and How Severe? Peak Trough Average Duration: 10 Months Average Severity: -1. 8% (Real GDP) Historical Period ’ 45 Nov ‘ 48 - Oct ’ 49 Jul ‘ 53 - May ’ 54 Aug ‘ 57 - Apr ’ 58 Apr ‘ 60 - Feb ’ 61 Dec ‘ 69 - Nov ’ 70 Green. Bizz Project Months 8 Feb ‘ 45 - Oct 11 10 8 10 11 Historical Period ‘ 73 - Mar ’ 75 Jan ‘ 80 - Jul ’ 80 Jul ‘ 81 - Nov ’ 82 Jul ‘ 90 - Mar ’ 91 Mar ‘ 01 - Nov ’ 01 Months Nov 16 6 16 8 8 Digital Safari Institute
Tracking the Business Cycle
Useful Economic Indicators l Gross Domestic Product (GDP) l Interest Rates (Federal Funds Rate) l Inflation (Consumer Price Index or CPI) l Employment (Number of New Jobs) l Unemployment (%) l Income Growth (% Change) l Corporate After Tax Profits Green. Bizz Project (% Change) Digital Safari Institute
Tracking the Business Cycle Expansion l Interest Rates: Up l Inflation: Up l Employment: Up l Unemployment: Down l Income: Up l Corp. Profits: Up Green. Bizz Project Contraction Down Up Down Digital Safari Institute
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