Macro Module 4 Finals

Front 1

Refers to the amount of unemployment that the economy normally experiences

Back 1

NATURAL RATE OF UNEMPLOYMENT or LONG RUN PROBLEM

Front 2

Referes to the year to year fluctuations in unemployment around its natural rate and it is closely associated with the business cycle

Back 2

CYCLICAL UNEMPLOYMENT OR SHORT RUN PROBLEM

Front 3

Refers to the alternating rises and declines in the level of economic activityl, sometimes extending over several years

Back 3

BUSINESS CYCLE

Front 4

Phases of Business Cycle

Back 4

• Peak

• Recession

• Trough

• Recovery

Front 5

A business cycle in which business activity has reached a temporary maximum. Here, the economy is near or at full employment and the level of real output is at or very close to the economys capacity

Back 5

PEAK

Front 6

True or false

During peak phase the price is likely to fall

Back 6

FALSE

During peak phase the price is likely to RISE

Front 7

A peak is followed by a __________

Back 7

RECESSION

Front 8

Severe and prolonged recession

Back 8

DEPRESSION

Front 9

A period of decline in total output, income, employment and trade which lasts for 6 months or more

Back 9

RECESSION

Front 10

A phase in Business cycle where output and employment is 'bottom out' at their lowest levels

Back 10

TROUGH

Front 11

A phase where output and employment rise toward full employment. As this intensifies, the price level may begin to rise before full employment and full-capacity production return

Back 11

RECOVERY