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Identify the four sections of the business cycle. Tell how each section shows changes in output/employment,...

Identify the four sections of the business cycle. Tell how each section shows changes in output/employment, unemployment, and inflation.

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Expert Solution

The business cycle model shows the fluctuations in a nation’s aggregate output and employment over time.The model shows the four phases an economy experiences over the long-run: expansion, peak, recession, and trough.

  • Four sections of business cycle are
  1. Expansion: the phase of the business cycle during which output is increasing.
  2. Peak: during a peak in the business cycle, output has stopped increasing and begins to decrease.
  3. Recession: the phase of the business cycle during which output is falling.
  4. Trough: during a trough in the business cycle, output that had been falling during the recession stage of the business cycle bottoms out and begins to increase again.

How each section shows changes in output/employment, unemployment, and inflation I have written on a page with diagram.

Rahul Sunny answered 1 year ago
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