Herzog gu chapter 1 introduction spring 2014 9 24

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Unformatted text preview: on Spring 2014 9 / 24 Macroeconomics The Business Cycle The business cycle is simply the ups and downs of the economy. We believe these ups and downs occur through changes in aggregate demand and aggregate supply. Aggregate demand captures total spending in an economy. Whereas aggregate supply is a measure of total production. Together we form a simple model that allows us to see the relationship between output and prices. Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 10 / 24 Macroeconomics Aggregate Demand and Supply (figure 1.2) Figure : Aggregate Demand and Aggregate Supply Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 11 / 24 Macroeconomics The Business Cycle Recession - A significant slowdown in economic activity (real GDP) Depression - A severe recession (i.e. The Great Depression) Expansion - A period of prolonged economic growth. Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 12 / 24 Macroeconomics Business Cycles (figure 1.3) Figure : Business Cycle Ryan W. Herzog (GU) Chap...
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This document was uploaded on 03/18/2014 for the course ECON 202 at Gonzaga.

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