1.  On your warm up/exit ticket sheet:  What do you think is the most traumatic experience a person could go through in their entire life?  Be ready to share.

2.  Frictional, Structural, or Cyclical?

3. 1. A recent college graduate who is seeking her first job 2. A former steelworker for a firm that has closed an obsolete plant 3. A worker who has quit his job to move to a new town to be with his family 4. A carpenter who is laid off when housing construction declines because of high interest rates 5. An autoworker who is laid off because auto sales are down 6. A homemaker who decides to seek work outside the home and begins the job search 7. A telephone operator whose job is eliminated when the phone company installs new computer-based switching equipment 8. An oil worker who is laid off because the demand for petroleum declines

4. Today’s LEQ: How can we determine the overall health of the economy?

5.  The Business Cycle is a period of macroeconomic expansion followed by a period of contraction, or decline  Represents major fluctuations (not day-to- day ups and downs)

6.  Economists follow a country’s GDP to predict business cycles  GDP is the total value of all final g/s produced in an economy and helps to measure our economic well-being

8.  Shows fluctuations: rising and falling of output in relation to potential output  Expansion: Economic growth as marked by rise in GDP  Contraction: Economic decline as marked by falling GDP  Peak: Point at which output starts to decline (start of recession)  Trough: Point at which output starts to increase (end of recession)  The period between the trough and the next peak is called the recovery period or expansion  Recession: two consecutive quarters (six months) of negative growth in real GDP  Depression: deep recession with especially high unemployment and low output

9.  We are always at some point in the business cycle  Cycles may last less than a year or continue for many years  Free enterprise systems are subject to business cycles because economic decisions are made by ind’ls and businesses acting in their own best self interest  Government plays a role in attempting to prevent wild swings in economic behavior

10.  Where we are in a given business cycle affects our lives every day  Available jobs?  Prices rising?