The Business Cycle

Standard 10:  Produce a graphic illustration of the business cycle and describe what happens to the economy at each stage of the business cycle.

Objective:

Analyze the key phases of the business cycle.

Wrap Your Brain Around the Concept

What is an example of a cycle in nature?

The business cycle in economic terms is cyclical as well. We have strong times when people have jobs, are confident, and spend money on luxury items.  We also have times when unemployment increases, people have less money to spend, businesses struggle to earn the same dollar amounts and must cut back.  Each response affects another part of the cycle (like amoeba tag).

Read pages 75-77 in the textbook.

Can you answer these questions?

1. During a recession, what is the average person's fear?
2. How is a depression different from a recession?
3. The executives at a television manufacturer increased production because they believed the economy was in recovery.  Now they have large quantities of TVs in their warehouses.  Why do you think they have this overstock condition?

Review Key Concepts

1. What are the three goals of a healthy economy?
2. How does monitoring economic measures help economists achieve the three  goals of a healthy economy?
3. Describe the effect of high unemployment on a nation's economy.
4. Describe what happens to an employee in each phase of the business cycle.

Partner Project

1. Work with a partner to produce a graphic illustration of the business cycle (expansion, recession/depression, trough, recovery) and describe what happens to the economy at each stage of the business cycle.  
2. Cite examples of businesses that can flourish in each stage of the cycle (hint: different businesses can flourish at different stages of cycle.)  Be prepared to share with the class.

Upcoming Test over Chapter 3

Next class time we will have a test over chapter 3.  Use Quizlet to help you prepare.."Marketing Chapter 3 Political and Economical Analysis  Quizlet Chapter 3