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What is a business cycle? Use the term repression and depression to explain this concept.
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First of all, please note that you are using the wrong word in your question. “Repression” is a term used in psychology and in political science. The proper economic term is “recession.”
A business cycle is a cycle in the macroeconomy in which the economy grows, comes to a peak, shrinks, and then hits bottom and starts back up again. In other words, it is a cycle in which the national economy expands and contracts.
There are a few terms that are typically used when talking about business cycles. First, there is “expansion.” This is a time when the economy is growing. The usual measure of economic growth is real Gross Domestic Product (GDP). The next part of the cycle is a peak. This is when GDP growth levels off and eventually stops. The peak is followed by a recession, also called a contraction. During this part of the cycle, real GDP declines. A depression is simply a very bad recession where real GDP declines a lot and unemployment goes up a lot. There is no set point at which a recession is bad enough to be called a depression. Finally, the recession or depression ends by hitting a “trough.” At that point GDP starts to go up again and the cycle begins anew.
Posted by pohnpei397 on September 12, 2013 at 11:29 PM (Answer #1)
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