2. Supply Curve

3. Demand Curve

5. What happens to demand if price goes UP? What happens to demand if price goes UP? What happens to supply if price goes UP? What happens to supply if price goes UP? What happens to demand if price goes DOWN? What happens to demand if price goes DOWN? What happens to supply if price goes DOWN? What happens to supply if price goes DOWN?

6. Refers to shifts in the economy over time Refers to shifts in the economy over time Measured by the growth rate of the Gross Domestic Product Measured by the growth rate of the Gross Domestic Product – GDP = total market value of goods and services produced in a year – Used as a common comparison point between countries

7. Expansion (increase in production and prices) Expansion (increase in production and prices) Crisis (stock exchange crash, b/k) Crisis (stock exchange crash, b/k) Recession (drops in price, output) Recession (drops in price, output) Recovery (stocks recover b/c price, incomes fall) Recovery (stocks recover b/c price, incomes fall) Since WWII, business cycle has not been as extreme (gov’t use of fiscal, monetary policy to avoid worst effects) Since WWII, business cycle has not been as extreme (gov’t use of fiscal, monetary policy to avoid worst effects)