Title: Define the phases of the business cycle.
Course: Principles of Business and Marketing (12051-18) > Section: Understanding the Role of Economics in a Global Economy

Definition should include an explanation of the four phases of the business cycle:

- Prosperity (expansion)—high demand, causing a sustained high level of production, income, employment, prices, and profits
- Recession—falling demand, causing a steady decline in production, income, employment, prices, and profits
- Depression (trough)—contraction of economy when demand is low, causing a sustained low level of production, income, employment, prices, and profits
- Recovery—rise in demand, causing a steady increase in production, income, employment, prices, and profits

Process/Skill Questions:

- What factors can help to keep an economy booming (i.e., sustain the prosperity phase of the business cycle)?
- What might cause a change from the prosperity phase to the recession phase (i.e., prompt a recession phase)?
- What factors can help to keep an economy in a downswing (i.e., sustain the recession phase of the business cycle)?
- What might cause a change from the recession phase to the prosperity phase (i.e., prompt a recovery phase)?
- How does consumer perception (fear vs. faith) of an economy influence the business cycle?
- How does the government use interest rates to influence consumer spending and borrowing?
- What influence does government involvement have on the business cycle?