Eco 100

4 . What can be misleading close the terminus `business cycle`The term business cycle refers to the former of alternation mingled with expansions (upturns ) and recessions (downturns . The term `cycle implies a well-ordered govern the term `business cycle therefore connotes a rhythmic pattern of expansions and recessions . This is misleading because , in reality , business cycles paseo an irregular pattern and better resemble weather fluctuations . No twain business cycles are identical . In sheath , the duration of business cycles varied from 18 months to 10 hanker time and 8 months5 . exempt intuitively why the un net rate is countercyclicalA countercyclical stinting quantity is one which is inversely tally with the general frugal condition . The unemployment rate is countercyclical for it tends to increase d uring stinting slowdowns and decrease during economic expansions .

The increase in engage which characterizes economic expansions drives firms to increase employment on the contrary , the fall in demand feature of speech of slowdowns urges firms to lay off workers6 . Explain why the heap up demand curve is downwards slopingAn aggregate demand curve illustrates the veto relationship between the quantity demanded of aggregate output and the aggregate terms train . The curve slopes downward due to two factors , both brought about by a swap in the aggregate price level (1 ) the wealth answer and (2 ) the divert rate effect . The wealth effect is due to the change in the purchase po wer of assets brought about by a change in t! he aggregate price level . On a joint note , an increase /decrease in the aggregate...If you want to occupy a full essay, order it on our website: OrderEssay.net

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