Business Cycle

4 Phases of the Business Cycle

*Peak- highest point of real GDP
          -exhibits greatest expending and lowest unemployment

*Expansion- real GDP increasing
                   - caused by increased in spending and decrease in unemployment

*Contraction/ Recession- real GDP declining for 5 months due to reduction in spending and increase                                            in unemployment

*Trough- lowest point of real GDP
              has the least amount of spending and highest amount of unemployment