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    Week 7 - 8

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    Mmapontsho Tshabalala
    This document discusses the business cycle and its key components. It defines a business cycle as periods of economic expansion and recession shown through fluctuations in GDP over time on a graph. Peaks indicate maximum economic activity (expansion) while troughs reflect minimum activity (recession). The length of a business cycle is measured from peak to peak or trough to trough. It also outlines different indicators that track the economy, such as leading indicators that predict future activity, coincident indicators that change with current output, and lagging indicators that reflect past performance. Finally, it notes that business cycles can be caused by factors inside or outside the economic system.

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    Week 7 - 8

    Uploaded by

    Mmapontsho Tshabalala
    66 views6 pages
    This document discusses the business cycle and its key components. It defines a business cycle as periods of economic expansion and recession shown through fluctuations in GDP over time on a graph. Peaks indicate maximum economic activity (expansion) while troughs reflect minimum activity (recession). The length of a business cycle is measured from peak to peak or trough to trough. It also outlines different indicators that track the economy, such as leading indicators that predict future activity, coincident indicators that change with current output, and lagging indicators that reflect past performance. Finally, it notes that business cycles can be caused by factors inside or outside the economic system.

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    This document discusses the business cycle and its key components. It defines a business cycle as periods of economic expansion and recession shown through fluctuations in GDP over time on a graph. Peaks indicate maximum economic activity (expansion) while troughs reflect minimum activity (recession). The length of a business cycle is measured from peak to peak or trough to trough. It also outlines different indicators that track the economy, such as leading indicators that predict future activity, coincident indicators that change with current output, and lagging indicators that reflect past performance. Finally, it notes that business cycles can be caused by factors inside or outside the economic system.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    66 views6 pages

    Week 7 - 8

    Uploaded by

    Mmapontsho Tshabalala
    This document discusses the business cycle and its key components. It defines a business cycle as periods of economic expansion and recession shown through fluctuations in GDP over time on a graph. Peaks indicate maximum economic activity (expansion) while troughs reflect minimum activity (recession). The length of a business cycle is measured from peak to peak or trough to trough. It also outlines different indicators that track the economy, such as leading indicators that predict future activity, coincident indicators that change with current output, and lagging indicators that reflect past performance. Finally, it notes that business cycles can be caused by factors inside or outside the economic system.

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    You are on page 1of 6

    Week 7-8:BUSINESS CYCLE

    Learning outcomes
    What will you learn about in this topic?

    Explain the time series composition

    Phenomenon of the business cycle

    Reasons for the business cycle

    Effects of the business cycle

    BUSINESS CYCLE

    A business cycle can be illustrated using a graph that shows


    the amount of the economic activity(GDP) each year for a period
    of years.

    A business cycle is basically defined in terms of periods of


    expansion or recession.

    Business cycle Cont

    TYPICAL BUSINESS CYCLE

    Business circle cont


    The amount, or level, of output is shown on the vertical axis.it is
    clear from the graph that the business cycle follows a pattern. The
    output rises and falls over time.
    The high point of the cycle are called the peaks. These are the
    maximum levels of economic activity reached at a specific time.
    The lowest points are called the roughs. These are minimum levels
    of economic activity reached at a specific time. The period (or
    length0 of a business cycle is the number of years it takes the
    economy to get from peak to peak or from trough to trough.

    Business cycle Cont

    Phenomenon of the business


    cycle
    INDICATORS OF ECONOMIC ACTIVITY
    The business cycle shows us what is happening to a countrys
    output over time. South African reserve bank has developed
    economic indicators that provide answers to these question

    Leading indicators-tells us where the economy is going.

    Coincident indicators-change at the same time as the quantity


    of output changes. Changes in the indicators tell us what is
    happening to the quantity of output produced by the economy at
    present.

    Lagging indicators-shows where the economy has been


    REASONS FOR BUSINESS
    Reason can be caused by an exogenous or endogenous variable
    CYCLE
    Business cycle Cont

    Exogenous variable is one that acts on a system from the outside


    Endogenous is one that works from inside the system.

    Thank you

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