Standard VI, E. 1, 3, & 5

1.Knowing that the level of business activity in the economy will fluctuate over time.

3. Describing the stages of a business cycle

5. Describing how the major indicators of the business cycle relate to each other in each phase of the business cycle.




Introduction:

The economy is in a constant state of flux. It experiences short term expansions and contractions and, hopefully, continues on an ever increasing long term growth trend. This suggests an ever-improving standard of living. This is not the case in all countries nor was it the case historically. Though we may try and prevent the fallout and costs to society that occur because of economic fluctuations, the roller coaster ride that is the post-industrial economy is a vast improvement over the economic stagnation that was the norm for all of recorded history until industrial revolution that took hold in the late 18th century.

The economy is often the number one concern on voters minds during elections, yet not enough citizens understand the business cycle. Being able to correlate macroeconomic data with phases of the business cycle is key to understanding the current state of the economy and what could, should, or should not be done, to continue our upward growth trend.
Objectives:

1. What are the 4 phases of the business cycle?
2. What happens to the major macroeconomic indicators during each phase?
3. What is the technical definition of a recession?
4. What are the historical trends of the business cycle for the U.S. economy?
Learning Activity:

Web exploration of business cycles
Remediation Checklist:


review DOC - TBD

Activity: Web Exploration of Business Cycles
Complete the following handout using the sources below:



Sources:
1. Dinesh Bakshi's macro page:
http://www.dineshbakshi.com/ib-economics/macroeconomics/165-revision-notes/1836-business-cycle
2. The Concise Encyclopedia of Economics:
http://www.econlib.org/library/Enc/BusinessCycles.html#lfHendersonCEE2-017_figure_003
3. National Bureau of Economic Research, Historical Business Cycles:
http://www.nber.org/cycles.html