ECON101 Business Cycle Discussion

As you know, the business cycle refers to the up (expansion) and down (recession) of economic activity over time as measured by real GDP. Briefly, explain how these ups and downs affect the following variables. In other words, I want you to show your understanding of how each of these variables move when there is a recession and again when there is economic expansion. In addition, a sentence or two explaining why it moves that way. I will be looking first for correctness in your initial answer and then your secondary responses to other people’s answers. (I will post 2 classmate’s work later so you can just finish the discussion first)

– General level of interest rates

– Real interest rates

– Yield Curves

– Stock prices

– Bond prices

– Inflation