Chapter+12

Notes
 * business cycle- a period of macroeconomic expansion followed by a period of contraction.
 * expansion- a period of economic growth as measured by a rise in real gdp
 * economic growth- a steady long term increase in real GDP
 * peak- the height of an economic expansion when real GDP stopped rising
 * contraction- a period of economic decline marked by falling real GDP
 * tough- the lowest point in an economic contraction, when real GDP stops falling
 * recession- a prolonged economic contraction
 * depression- a recession that is especially long and severe
 * stagflation- a decline in real GDP combined with a rise in the price level
 * leading indicators- key economic variables that economists use to predict a new phase of business cycle

Questions 1-6 contraction is the downfall trough is the bottom or $4.3 trillion
 * 1) During the trough is when a business cycle can lead to an economic recession.
 * 2) Interest rates can go up really fast and then drop just as quickly leading to a contraction which would not be good.
 * 3) The stock market is considered to be a leading indicator of economic change because it shows how the economy is by stocks going up or down.
 * 4) The Great Depression effected economists beliefs about macroeconomy by showing them how the modern economy can fall into long lasting contrations.
 * 5) I would want to be at the peak of a business cycle because that is where you can make the most money and have the best besiness.
 * 6) Peak would be $4.9 trillion