1. Miss Smith 7 th Grade Civics *pgs. 534-537

2.  Business cycle- economic pattern in which an economy goes through good times and bad times  Expansion- period of the business cycle marked by growth  Inflation- rise in the cost of goods and services  Prices inflate/rise when there are more customers to compete for goods and services

3.  Costs of production- business costs such as wages, payments for raw materials, transportation, and interest on money borrowed  This could cause prices to rise  Peak- high point in the business cycle when expansion and inflation stop  Contraction- slow period in business cycle

4.  Recession- period in the business cycle when businesses fail, people become unemployed, and profits fall  Trough- lowest point in the business cycle  Depression- very low trough when unemployment becomes very high

5.  Took place in the 1930s  Stock prices fell and banks failed  Production slowed, businesses closed  Lasted 10 years

6. *Do not write  Place the following events leading to the Great Depression in correct order:  A) One in four people unemployed  B) Stocks fell sharply  C) Banks failed

7.  The New Deal (established by Franklin D. Roosevelt) included ways to improve the economy. This included the creation of:  More jobs (civic construction/building parks and schools, etc.)  The FDIC and SEC  The Social Security system