Business Cycle

 The fluctuation in economic activity that an economy experiences over a period of time.

The 4 Phrases:

 1. Expansion- spending increases and unemployment decreases 

 2. Peak- The highest point of Real GDP, the greatest spending and lowest unemployment however inflation becomes a problem 

 3. Contraction/ Recession- Real GDP declines for 6 months. A reduction of spending levels and increase of unemployment 

 4.Trough- Lowest Point of Real GDP. lowest amount of GDP and highest unemployment. (you have to hit a low point)