1. Chapter 6 Lesson 2
The Business Cycle

2. Questions What kind of “cycles” do you know about?
Bicycles, Washing Machine Cycles, Life Cycle
What do they all have in common?
Something goes around

3. What You’ll Learn What the business cycle is.
What occurs during expansions and contractions
How economic indicators predict business cycles

4. Initiation
How would you describe our economy today?

5. Phases of the Business Cycle
Expansion and contractions of many industries at one time is a business cycle.
Most cycles consist of 1 of 2 major phases:
Expansionary
Contractionary

7. Expansionary Phase
Business may expand (build new factories, hire more employees, etc.)
Unemployment = LOW
Competitive wages to attract new workers
Wages, prices, and interest rates generally rise
Stock Market often booms

8. Contractionary Phase Consumers start to spend less
Businesses scale back production
Layoffs possible
Unemployment rises
Banks provide fewer loans

9. Recession and Depression
Recession – phase of the business cycle in which growth falls for two three-month periods in a row
Depression – Business cycle phase in which business activity remains far below normal for years

10. Business Cycles: US
economic-timeline/
What could we add for the last few years?

11. Economic Indicators How are business cycles predicted?
Economic Indicators-data that shows how the economy is performing.
Examples?
Housing loans, bankruptcies, new orders of consumer goods and materials by manufacturers
indicators

12. Activity Respond to this question in your notes:
Why would a manager care about business cycles and economic indicators? s

13. Discussion Question
How would your life change if one or both of your parents/guardians lost their jobs and couldn’t find work?
What would you do to help your family survive an economic depression?

14. Great Depression Video
Kn0

15. Section 6.2 Assessment Questions
P.149
Fact and Idea Review #1-5
Critical Thinking #1 & 2