1. THE BUSINESS CYCLE “The roller coaster of Macroeconomics”

2. WHAT IS THE BUSINESS CYCLE?? http://www.youtube.com/watch?v=NoTXYOIQBCQ

5. BUSINESS CYCLE  Measures real GDP over time  Shows the increase or decrease in Y throughout time in a graphic way.  Phases of the Business Cycle  Expansion/Recovery Phase- real GDP increases over time (Economic Growth)  Potential Problem - inflation  Contractionary/Recessionary Phase- real GDP decreases over time  Recessions are two consecutive quarters of negative GDP growth  Potential Problem – deflation and unemployment  Peak- the highest point in an Expansion phase before a recessionary phase  Trough- the lowest point in a recessionary phase before an expansionary phase  Growth Trend Line- average constant growth rate of the economy over time

6. THE BUSINESS CYCLE http://www.youtube.com/watch?v=jGP- vPEHRRE

7. WHAT CAUSES THE UPS AND DOWNS??  Capital Expenditures WHY???

8. WHAT CAUSES THE UPS AND DOWN???  Inventory WHY???

9. WHAT CAUSES THE UPS AND DOWNS????  Innovation WHY???

10. WHAT CAUSES THE UPS AND DOWNS???  External / Exogeneous Shocks-  Demand side  Supply side WHAT ARE SOME REAL EXAMPLES?

11. WHAT CAUSES THE UPS AND DOWNS???  Government Policy  Fiscal  Regulatory

12. WHAT CAUSES THE UPS AND DOWNS???  EXPECTATIONS!!!

13. THE US BUSINESS CYCLE Please provide one CD/One CM