The economic cycle

There is an inherent tension between price stability, or inflation, and unemployment,

While reading, consider the following questions:

1. What are the tensions between controlling either inflation or unemployment?
2. Is there an acceptable amount of inflation or unemployment if the economy as a whole is doing well?

• Read Chapter 6: Business Cycle from John Petroff’s “Macroeconomics” text book, which provides definition and insights into the key terminology used by economists to describe the stages of the business cycle.

• Read the section on Business Cycle’s from the Wikibooks: “Macroeconomics” text book, to learn about the business cycle and the four phases that help define this cycle. Real GDP varies over time, and the business cycle describes the pattern of its fluctuations.

Having read these two chapters, jot down any of your reflections, thoughts or questions on this subject in a WeNotes post.