- Explain, using a business cycle diagram, that economies typically tend to go through a cyclical pattern characterized by the phases of the business cycle.
- Explain the long-term growth trend in the business cycle diagram as the potential output of the economy.
- Distinguish between a decrease in GDP and a decrease in GDP growth.
- Define "business cycle"
- Explain each phase of the diagram (and make sure you write the correct definition of recession)
- Long term trend/output gap (draw a second diagram to explain this)
- Distinguish between a decrease in GDP and a decrease in GDP growth