202.T&C.1

202.T&C.1 - Econ 202: MacroEconomics Terms and Concepts...

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Econ 202: MacroEconomics Terms and Concepts from Week 1 Business Cycles : the four phases of the business cycle upturn - output, employment levels, investment and borrowing, and prices in the product market and factor market are all rising peak - all of the above have reached their maximum; the upper boundary is determined by the size of the population and its corresponding civilian labor force, the loanable funds that banks are willing to offer, and the amount of physical capital available to the economy. At the peak, because no further growth is possible, those employed in the production of new capital become unemployed, and this sends the economy into the next phase . .. downturn - output, employment levels, investment and borrowing, and prices in the product market and factor market are all falling, accelerated downward by the unemployment in the market for physical capital trough - the cycle bottoms out, with all of the above at their lowest level. The economy pulls out of the trough when employment increases because there is demand for
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This note was uploaded on 04/03/2008 for the course ECON 202 taught by Professor Iforget during the Spring '08 term at Drexel.

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202.T&C.1 - Econ 202: MacroEconomics Terms and Concepts...

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