Lecture 12 - ECONOMICS 100B Professor Steven Wood Lecture 12 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley Do

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ECONOMICS 100B Professor Steven Wood 02/24/11 Lecture 12 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley. Do not share, copy, or illegally distribute (electronically or otherwise) these notes. Our student-run program depends on your individual subscription for its continued existence. These notes are copyrighted by the University of California and are for your personal use only. D O N O T C O P Y Sharing or copying these notes is illegal and could end note taking for this course. LECTURE: Today’s lecture will focus on Chapter 8: Business Cycles: An Introduction. ICLICKER QUESTIONS/ANSWERS: 1.) A leading countercyclical variable will reach a peak before a trough in the business cycle . 2.) Staggered price setting is the lack of coordination by firms in changing prices. BUSINESS CYCLES: Business cycles are short-run fluctuations in economic activity around its long-run path of growth. Business cycles are divided up into 4 parts: 1.) Peak: the maximum level of aggregate economic activity before the economy begins to contract. 2.) Contraction/Recession: the period of time when aggregate economic activity shrinks. A depression is an especially long and severe recession. 3.) Trough: the lowest level of aggregate economic activity before the economy begins to recover. 4.) Recovery/Expansion: the period of time when aggregate economic activity grows. A boom is an extended period of economic expansion where economic activity is very high. Booms typically occur late in economic expansion before peaks are reached. Growth recessions occur when economic activity is growing, but is not growing quickly enough to bring the unemployment rate down. As a result, the economy may be expanding, yet unemployment may still be increasing. In the graph below, gray-shaded bars are officially designated recessions. The business cycle is the sequence from peak to peak or trough to trough. Peaks and troughs are turning points. The dates for the turning points are officially designated by the NBER Business Cycle Dating (BCD) Committee, which typically waits 9-
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ECONOMICS 100B ASUC Lecture Notes Online: Approved by the UC Board of Regents 02/24/11 D O N O T C O P Y Sharing or copying these notes is illegal and could end note taking for this course. 2
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This note was uploaded on 02/06/2012 for the course ECON 100A taught by Professor Woroch during the Fall '08 term at University of California, Berkeley.

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Lecture 12 - ECONOMICS 100B Professor Steven Wood Lecture 12 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley Do

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