Econ 14.1

expansion

Period of growth of real GDP; recovery from recession.

trough

Point in time when real GDP stops declining and starts to expand.

peak

Point in time when real GDP stops expanding and starts to decline.

economic model

Set of assumptions in a table, graphs, or equations used to describe or explain economic behavior.

depression

State of the economy with large numbers unemployed, declining real incomes, overcapacity in manufacturing plants, general economic hardship.

business cycle

Systematic changes in real GDP marked by alternating periods of expansion and contraction.

business fluctuation

Changes in real GDP marked by alternating periods of expansion and contraction that occur on a less than systematic basis.

index of leading indicators

Composite index of 11 economic series that move up and down in advance of changes in the overall economy; statistical series used to predict business cycle turning points.

depression scrip

Currency issued by towns, chambers of commerce, and other civic bodies during the Great Depression of the 1930's.

recession

Decline in real GDP lasting at least two quarters or more.

trend line

Growth path the economy would follow if it were not interrupted by alternating periods of recession and recovery.