16466 Chapter Notes - Chapter 12: Solow–Swan Model, Business Cycle, Longrun
Document Summary
Economics for today business cycle & economic growth chapter 12. Key points: the business cycle roller-coaster, the determinants of the business cycle, total spending and the business cycle, solow growth model, endogenous growth model, the goals of macroeconomic policy. The business cycle roller coaster: business cycles are inherent to market economies, business cycles are alternating periods of economic growth and contraction, which are measured by changes in: Employment: the business cycle model shows short-term fluctuations in the level of economic activity along a long-term trend. An upturn in the business cycle during which measures of aggregate economic activity rise: recession. Peaks occur when economies reach their maximum after an expansion. When output, sales and employment decline in the economy. Troughs occur when economies reach their cyclical minimum post-recession. Real gdp has increased at an average annual growth rate of. Across the business cycle above- average annual growth rates have alternated with below- average annual growth rates.
