Chapter 26 Questions - Lisa Mauro Chapter 26 Economics I 1...

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Lisa Mauro Chapter 26 Economics I 1) Four phases of the business cycle: Peak, Recession, Trough, Expansion How long do business cycles last? The duration of each phase will vary from 2-3 years as long as 15yrs How do seasonal variations and Long-run trends complicate measurement of the business cycle? Due to a spurt in production and sales it un-expectantly increases the economy and when the season is over, the economy goes into a “recession”. Why does the business cycle affect output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables? Capital goods and durable goods last, where a purchase can be postponed. Consumers can’t postpone the buying of nondurables such as food. 2) What factors make it difficult to determine the unemployment rate? Part time are counted as full time, discourages workers are not counted Why is it difficult to distinguish between frictional, structural and cyclical unemployment?
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