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Economic Fluctuations (Business Cycles)
Investigating the Drivers of Economic Fluctuations
A central question in macroeconomics is to determine the causes of economic fluctuations. As an initial step in this investigation, economists often examine the contribution of each expenditure component of GDP to the economy's periods of growth and decline.
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Economics
Economy
Introduction to Macroeconomics Course
Ch.3 Aggregate demand and the multiplier model - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
Social Science
Empirical Science
Science
Introduction to Microeconomics Course
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Recession
Economic Boom
Historical Examples of Severe Economic Downturns
Correlation between the Business Cycle and Unemployment Rate
Investigating the Drivers of Economic Fluctuations
Integration of Supply-Side and Demand-Side Models
The Great Moderation: Post-WWII Economic Stability
An economy observes the following trends over several consecutive months: the total production of goods and services decreases, the rate of joblessness rises, and average household incomes fall. Based on the typical pattern of cyclical economic movements, what do these simultaneous trends most strongly suggest?
Arrange the following four phases of an economic cycle into a logical sequence, starting from the point of maximum economic output.
Analyzing a Country's Economic Performance
The term 'business cycle' accurately describes the pattern where an economy's growth rate fluctuates, slowing down during certain periods but always remaining positive.
Economic Cycle Transitions
Evaluating Claims of Economic Stability
Match each phase of an economic cycle with its corresponding description of economic activity.
Differentiating Economic Slowdown from Contraction
An economy has just experienced a period where its total output reached a maximum level after several years of steady increases. In the months that followed, growth began to slow, and the unemployment rate, which had been falling, started to level off and then slowly rise. Which phase of the economic cycle has this economy most likely just passed through?
The recurring, cyclical pattern of an economy shifting between periods of growth and periods of decline is commonly referred to as the ____.
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Calculating Component Contributions to GDP Growth
Figure 3.10: Growth Rates of Consumption, Investment, and GDP in Select Economies (1956–2022)
Economic Shock
US GDP and Consumption Dynamics During the COVID-19 Shock (Q2 2020)
Consumption as the Largest Component of GDP
Analyzing an Economic Downturn
An economy experiences a sharp recession. Data reveals that business investment spending fell by 20%, while household consumption spending fell by only 5%. An economist argues that the decline in household consumption was a more significant contributor to the overall economic downturn than the decline in business investment. Which of the following statements, if true, would provide the strongest support for the economist's argument?
Evaluating Drivers of Economic Recessions
In most economies, because household consumption constitutes the largest share of total economic output, it is also the component that experiences the largest percentage changes during periods of economic expansion and contraction.
Rationale for Decomposing Economic Output
Match each expenditure component of an economy's total output with its typical characteristic during periods of economic fluctuation.
Analyzing Component Impact on Economic Output
An economy's total output declines. An economist is analyzing the contributions of two expenditure components, Household Spending and Business Investment, to this decline. Household Spending, which constitutes 60% of the total economy, decreased by 4%. Business Investment, which constitutes 20% of the total economy, decreased by 12%. Based on this data, which statement provides the most accurate analysis of the situation?
A country is experiencing a mild economic slowdown. To stimulate growth, policymakers are debating two proposals. Proposal A aims to increase household spending by 2% through broad-based tax rebates. Proposal B aims to increase business investment by 8% through targeted incentives. Based on the typical structure of a developed economy, which statement provides the most accurate evaluation of the likely short-term impact of these proposals?
Analyzing Contributions to an Economic Downturn