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The definition of contraction in economics is a sustained decrease in economic activity. It is characterized by decreased Gross Domestic Product (GDP), industrial production, and employment ...
Expansion: An expansion is a period of rising economic activity. Increased employment, higher wages, and increased production characterize expansion in the business cycle. Periods of slower growth ...
If the contraction is severe enough, the economy will enter into a depression, which is a period of severe and prolonged economic contraction. The last depression in the United States was the ...
The cycle is classified into stages or phases. Therefore, the business cycle parts are: expansion. recession. peak. trough. Expansion and recession are the phases that depict the stage of the ...
An economic depression is defined as a severe, long-term downturn in economic activity. It is characterized by a widespread contraction in production and employment, with significantly falling ...
Recession vs. Depression. Both of these terms refer to a period of time in which there is a downturn in the economy. The difference between the two terms refers to the length and severity of the ...
There are multiple causes for a recession. The top ones include high-interest rates, consumer confidence, deregulation, inflation, and poor management. It is also vital to point out that some of ...
The Peak. As indicated by the term peak, the top of the business cycle occurs when economic growth has reached a point where it will stabilize for a short time and then reverse direction. No ...
Economic constraints examples are inflation, interest rates, and unemployment rates. An increase in these rates will negatively affect a business. Inflation is a severe concern in business because ...
Contractionary Monetary Policy is one of the two types of monetary policy and can be defined as actions taken by the central bank in order to close an inflationary gap in an economy. An ...