EC202 1nd Edition Lecture 20Outline of Last Lecture I. Finishing up lesson 5Outline of Current Lecture II. Short run fluctuationsIII. RecessionIV. DepressionV. ExpansionVI. Boom VII. Characteristics of fluctuationsCurrent Lecture-short run fluctuations-irregular in length and severity -have widespread impacts-unemployment rises during a recession and falls during an expansion-recessions tend to be followed by a decline in inflation and are often preceded by an increase in inflation-durable goods industries are more sensitive and services and non-durable goods industries less sensitive-recession (or contraction)-a period in which the economy is growing at a rate significantly below normal-informally, a period during which real GDP falls for at least 6 consecutive months-recent recessions have lasted between 6 and 16 months-depression-a particularly severe or protracted recessionThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-expansion-a period in which the economy is growing at a rate significantly above normal-normally lasts longer than recessions-boom-a particularly strong and protracted expansion-characteristics of fluctuations-expansions and recessions are-felt throughout the economy and often globally-felt not just in a few industries-the unemployment rate -typically rises sharply during recessions-the unemployment resulting from a recession is called cyclical unemployment -recessions-tend to be preceded by inflation-tend to bring lower inflation rates-durable goods-cars, houses, capital equipment-sensitive to fluctuations-services and nondurables-food-much less sensitive to
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