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- Expansion - a period of growth in real GNP.
- Peak ? the highest point in a business cycle.
- Contraction ? period of decline in real GNP.
- Trough- lowest level the economy reaches during a business cycle.
- Recession ? during the contraction phase of the cycle real GNP declines for two consecutive quarters, or six months.
- Depression ? if a recession is severe and persistent, maybe people out of work and many businesses closed.
- If population increases while production of goods and services remains the same, everyone's share of goods and services will be smaller.
- A combination of increasing supply and increasing demand can cause an economy to enter a long expansionary phase of the business cycle...
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