1. Business Fluctuations (Causes and Indicators)
Chapter 13 Sections 4 and 5
Business Fluctuations (Causes and Indicators)

2. Clip of the Day

6. Causes of Business Fluctuations (AKA The Business Cycle)
Four main forces – Business Investment/Decisions, Government Activity, External Factors, and Psychological Factors

7. Business Decisions
Future Outlook – Things are going good they will spend more, create jobs. Things going bad, they will spend less, cut jobs.
New Innovations – New inventions or production techniques.

8. Government Policies on taxing and spending money (Fiscal Policy)
Controlling the money supply (Monetary Policy)

9. External Factors
Examples…
Wars
Availability of raw materials

10. Psychological Reactions
Panic (Ex. 9/11, this recent recession)

11. Economic Indicators
Economic statistics that measure the economy

12. Leading Indicators
Stats that may show what will happen in the economy (Major Indicators/Important)

13. Coincident Indicators
Changes that occur at the same time as the change in the business cycle.

14. Lagging Indicators
Seem to happen later on in the business cycle. Typically gives a clue as to the duration (length) of the phase.