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Business cycles are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion ...
In business cycle theory and finance, any economic quantity that is positively correlated with the overall state of the economy is said to be procyclical. [2] That is, any quantity that tends to increase in expansion and tend to decrease in a recession is classified as procyclical.
Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations are accounted for by real (in contrast to nominal) shocks. [1] Unlike other leading theories of the business cycle, [ citation needed ] RBC theory sees business cycle fluctuations as the efficient response to exogenous ...
It is a period of economic growth as measured (for example) by a rise in real GDP. [1] [failed verification] [2] The explanation of fluctuations in aggregate economic activity between economic expansions and contractions ("booms" and "busts" within the "business cycle") is one of the primary concerns of macroeconomics. [3]
In economics, a trough is a low turning point or a local minimum of a business cycle. The time evolution of many economics variables exhibits a wave-like behavior with local maxima (peaks) followed by local minima (troughs). A business cycle may be defined as the period between two consecutive peaks. [1] [2]
In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. [ 1 ] [ 2 ] Recessions generally occur when there is a widespread drop in spending (an adverse demand shock ).
Chief economic cheerleader: U.S. President Joe Biden delivers remarks on the U.S. economy in West Columbia, South Carolina on July 3. (REUTERS/Jonathan Ernst) (Jonathan Ernst / reuters)
The multiplier–accelerator model can be stated for a closed economy as follows: [3] First, the market-clearing level of economic activity is defined as that at which production exactly matches the total of government spending intentions, households' consumption intentions and firms' investing intentions.