Business Cycles In the summer of 1929, John J. Raskob, Senior Financial Officer of General Motors, declared that the United States was on the verge of the greatest industrial expansion in its history.

[ 7.2 ] Business Cycles Learning Objectives Analyze business cycles using economic data. Describe four factors that keep business cycles going. Explain how economists predict changes in business cycles. Analyze the impact of business cycles in U.S. history.

Business Cycle Phases What is the point of slowest business activity in a business cycle called?

Forecasting Business Cycles How do expectations by business leaders and consumers contribute to a recession?

Forecasting Business Cycles Economists try to predict business cycles by studying the activity of certain leading indicators. Stock Prices Interest Rates Production of Capital Goods

Business Cycles in History Periods of growth always are followed by period of decline

Business Cycles in History

Business Cycles in History

Business Cycles in History

Business Cycles in History

Quiz: Business Cycle Phases When real GDP stops rising, the economy has reached a __________. A. recession B. trough C. contraction D. peak

Quiz: What Drives Business Cycles? When the economy is expanding, which of the following is a business MOST likely to do? A. invest in new equipment B. lay off employees C. cancel new product development D. close its international branches

Quiz: Forecasting Business Cycles Which of the following did John J. Raskob prove? A. Business cycles always follow a repetitive pattern. B. Only experienced business leaders can forecast business cycles. C. It is not always possible to forecast a business cycle. D. Any business cycle can be predicted by a skilled forecaster.

[ 7.2 ] Business Cycles Learning Objectives Analyze business cycles using economic data. Describe four factors that keep business cycles going. Explain how economists predict changes in business cycles. Analyze the impact of business cycles in U.S. history.