Section12 - UNIVERSITY OF CALIFORNIA, BERKELEY Department...

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UNIVERSITY OF CALIFORNIA, BERKELEY Dorian Carloni Department of Economics ECON 100B, Fall 2011 SECTION 12: Business Cycles 12.1. Business Cycles Basics Business cycles are divided into 4 parts: 1. the peak : the maximum level that aggregate economic activity reaches before it begins to contract. 2. the contraction or recession : the period of time when aggregate economic activity is shrinking 3. the trough : the lowest level that aggregate economic activity reaches before it begins a sustained expansion 4. the recovery and expansion : the period of time when aggregate economic activity is growing The business cycle is the sequence from one peak to the next peak or from one trough to the next trough 1. Direction : Procyclical, Countercyclical, or Acyclical. 2. Timing: Leading, Coincident, Lagging, or Not designated 3. Volatility: Higher, Similar, Lower, or Not designated 12.2. Macro Variable and the Business Cycle Direction: the unemployment rate is a countercyclical variable 1
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This note was uploaded on 03/18/2012 for the course ECON 100B taught by Professor Wood during the Spring '08 term at University of California, Berkeley.

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Section12 - UNIVERSITY OF CALIFORNIA, BERKELEY Department...

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