Alright class, today we are talking about the economy. Who knows about the business cycle?
Prosperity Recession Depression Recovery
No one? Well, in our economy their are 4 stages in the business cycle. There is prosperity, recession, depression, and recovery.
I think most of us have heard about depression and recession, haven't we? There was the Great Depression in the 1930's and we were in a recession just a few years ago. How about prosperity and recovery?
Recession makes economic activity slow down and the GDP declines.
Thank you for speaking up Jim and Kate. About prosperity and recovery though. Prosperity is the peak of the business cycle, and it is a time where most people are working, businesses have record numbers, and the GDP increases. It also makes inflation rise and companies produce to much. In recovery the GDP grows and more goods and services are supplied
Recession also has high interest rates and increases inflation . You also get reduced production and less money
Oh yeah! My parents were talking about how the USA was prosperous in the 1990's! They didn't know many people that were unemployed, and the GDP went up steadily.