Economics is a social science with stakes in many other fields, including political science, geography, mathematics, sociology, psychology, engineering, law, medicine and business. The central quest of economics is to determine the most logical and effective use of resources to meet private and social goals. Economics Grade 12 Notes PDF Download
Economics Grade 12 Notes PDF Download
Grade 12 Economics Business Cycles Notes
Important!
- Analysis and explanation of business cycles, and how they are used in forecasting.
- Know the types of business cycles and what happens in the economy over a few years.
- Understanding the different phases of a business cycle can help individuals make lifestyle decisions, investors make financial decisions and government make appropriate policy decisions.
The composition and features of business cycles Key concepts in a table format
| Term | Description |
|---|---|
| Business Cycle | Successive periods of increasing and decreasing economic activity / a time series showing repeated increasing and decreasing economic activity/ the recurrent (not periodic) pattern of expansion and contraction in the level of economic activity. Business cycle refers to the changes in the economy that produces a cyclical pattern that repeats itself every three to five years. It is also known as the economic cycle. |
| Recovery | When GDP begins to increase following a contraction and a trough in the business cycle; an economy is considered in recovery until real GDP returns to its long-run potential level. |
| Prosperity | Increased output and excessive economic activities following the recovery / economic growth rate on a year – to -year basis is positive, at an increasing rate. |
| A period between the trough and peak including both recovery and prosperity. | |
| Expansion | A period between the trough and peak including both recovery and prosperity. |
| Recession | A negative economic growth for at least two successive quarters/ a decline in economic activity lasting more than a few months. |
| Depression | Continuous decrease in the production output and economic activities. |
| Contraction | A period between the peak and trough including both recession and depression. |
| Peak | The highest point between the end of an economic expansion (end of prosperity) and the start of a contraction (start of recession). |
| Boom | The period immediately before and through the upper turning point is known as the boom. |
| Real business cycle | An actual business cycle is obtained when the effects of irregular events, seasons and long-term growth trend are removed from the time series data. |
| Trough | The lowest point between the end of an economic contraction (end of depression) and the start of a expansion (start of recovery). |
Download Business Cycles in a pdf document: