The Business Cycle

The 4 stages:

1. Recovery - GDP increases, unemployment rate decreases, aggregrate demand increases, price increases
2. Boom -Beginning of contraction, inflation
3. Recession - GDP decreases, unemployment rate increases, aggregrate demand decreases, price decreases
4. Trough - End of contraction, unemployment, the trough cannot go lower because there are still people who demand goods. The economy begins to recover again after trough