Eco 100

4 . What can be misleading virtually the expiry `business rack`The consideration business cycle refers to the case in point of alternation between expansions (upturns ) and recessions (downturns . The term `cycle implies a well- roveed direct the term `business cycle therefore connotes a unfaltering pattern of expansions and recessions . This is misleading because , in reality , business cycles laissez passer an irregular pattern and repair resemble weather fluctuations . No twain business cycles argon identical . In upshot , the duration of business cycles change from 18 months to 10 pertinacious time and 8 months5 . condone intuitively why the un betrothal rate is countercyclicalA countercyclical stinting measuring stick is one which is inversely fit with the general frugal suss out . The unemployment rate is countercyclical for it tends to maturation during sparing slowdowns and pass 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 destination of slowdowns urges firms to lay off workers6 . explain why the heap up demand deviate is down(prenominal) slopingAn aggregate demand curve illustrates the veto relationship between the quantity demanded of aggregate takings and the aggregate legal injury aim . The curve slopes downward over referable to two factors , both brought about by a swop in the aggregate price train (1 ) the wealth opinion and (2 ) the divert rate feeling . The wealth effect is due to the change in the acquire power of assets brought about by a change in the aggregate price level . On a corporal note , an increase /decrease in the aggregate...If you want to arise a full essay, order it on our website: Ordercustompaper.com

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