- 1 cycle occurs from trough to trough
- Cycle avg. 5 - 7 years
- Recessions last approx. 14 months
- Peaks and troughs meaningless b/c we never know we are in one until its over
- Trough = end of recession
- Recession lose >10% of real GDP -> Depression
Peak - Highest point of real GDP; shows max amount of spending and min unemployment; inflation is a problem.
Expansion (recovery) - Real GDP up b/c of increase in spending and decrease in unemployment.
Contraction/Recession - Real GDP down for 6 months; unemployment up & spending down
Trough - Lowest point of Real GDP: max unemployment and min spending
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