It is typical to see economic activity pick-up around the holidays or harvests. For example, every year, the Chinese and some other East Asian cultures celebrate Spring Festival or what is known as “Chinese New Year”. People travel to their home village, buy gifts and celebrate with elaborate family meals. Consumption rises before and falls after the festivities are over. Economic fluctuations due to seasonal demand factors are one thing, but modern economies experience ups-and downs for a host of reasons including shocks such as droughts or economic crises. One of the main reasons for economic downturns is the breakdown in some aspect of the economic mechanism. In this section, students will be introduced to the basic definition of a business cycle, learn how to define the different phases of the cycle, and explain the different mechanisms that give rise to recessions.
Community College / Lower Division, College / Upper Division