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Western University
Economics 2152A/B
Jennifer Mori

Business Cycle Measurement Chapter 3 Macroeconomics can be divided into two main areas of study One area is the study of how an economy evolves over timethis is the study of economic growth and it focuses on the long run The second area is the fluctuations that happen over the short run the time frame we live in day to day Thus the ups and downs of stock markets currency and interest rates unemployment rates all the numbers we see reported on a daily basisThese fluctuations or vicissitudes are what is commonly called the business cycleOver time these vicissitudes will exhibit a pattern or trend This trend if it developments will represent a benchmark that we can measure a given value against For example we could say that in the first quarter of the year real GDP was 01 above or below trend We would be essentially comparing the current value to value we would normally expect ie the trend valueThe main point if this chapter is to familiarize ourselves with the terms that are used to describe the business cycle Peaka large positive deviation from trendTrough a large negative deviation from trendA series of peaksboomA series of troughsrecession
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