Chapter 11 Outline
IV. THE NATION'S ECONOMIC PERFORMANCE
A. Business Cycles
	1. Although real GDP has increased over time, this increase has not been steady.
	2. Recurring fluctuations in level of economic activity are called the business cycles.
	a. During an expansion phase of the business cycle, real GDP is increasing.
		1. The expansion phase is sometimes called recovery.
	b. At the peak of the business cycle, real GDP is at a maximum.
		1. As the economy approaches the peak, inflation may become a major problem.
	c. During the contraction phase of the business cycle, real GDP is decreasing.
	d. At the trough of the business cycle, real GDP is at a minimum.
		1. Unemployment becomes an increasingly severe problem as the economy approaches the trough.
		2. The contraction and trough phase are sometimes called a recession.
		a. When a recession is particularly severe and prolonged, it is called a depression.
	3. The phases of the business cycle differ both in terms of intensity and duration.
	4. Both the long-run trend and cyclical movements of real GDP are determined by aggregate demand and aggregate supply.

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