Reading 17 Understanding Business Cycles (Layout)
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This reading is organized as follows:
Section 2 describes the business cycle and its phases. The typical behaviors of businesses and households in different phases and transitions between phases are described.
Section 3 provides an introduction to business cycle theory, in particular how different economic schools of thought interpret the business cycle and their recommendations with respect to it.
Section 4 introduces basic concepts concerning unemployment and inflation, two measures of short-term economic activity that are important to economic policymakers.
Section 5 discusses variables that demonstrate predictable relationships with the economy, focusing on variables whose movements have value in predicting the future course of the economy.