Stages of the economic cycle

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  • Economic Cycle
    • Describes the fluctuations in the levels and rates of growth of GDP over a period of time. It is sometimes referred to as the trade or the business cycle
      • There are four stages: Boom, Downturn, Recession and Recovery
        • Boom:A time of rapid growth and expansion in the economy
        • Recovery: Positive growth returns, slowly at first then picks up pace
        • Recession: There are at least two consecutive quarters of negative growth
        • Downturn: The boom slows and the rate of growth decreases
    • Boom
      • High output
      • Low unemployment
      • Rising incomes
      • High Inflation
      • High base rate
      • Rapid % Growth GDP
    • Downturn
      • Static output
      • Increasing unemployment
      • Static incomes
      • Slowing Inflation
      • Falling base rate
      • Slowing % Growth GDP
    • Recession
      • High unemployment
      • Falling output
      • Low inflation
      • Falling incomes
      • Negative % Growth GDP
      • Low base rate
    • Recovery
      • Static incomes
      • Increasing base rate
      • Increasing output
      • Increasing % Growth GDP
      • Rising inflation
      • Falling unemployment

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