IshaanBilala
Banned
Business Cycles
The modern industrial economies experience significant swings in economic activity. In some years most industries are booming and unemployment is low; in other years most industries are operating well below capacity and unemployment is high. Periods of economic expansion are typically called booms; periods of economic decline are called recessions or depressions. The combination of booms and recessions, the ebb and flow of economic activity, is called the business cycle.
Recessions
One of the most popular definitions of recessions is that they are periods when real gross national product (GNP) has declined for at least two consecutive quarters. In 1990, real GNP declined between the third and fourth quarters and again between the fourth quarter of 1990 and the first quarter of 1991. Hence, there is general agreement that a recession did occur.
Great Depression
A worldwide depression struck countries with market economies at the end of the 1920s. Although the Great Depression was relatively mild in some countries, it was severe in others, particularly in the United States, where, at its nadir in 1933, 25 percent of all workers and 37 percent of all nonfarm workers were completely out of work. Some people starved; many others lost their farms and homes.
Bubbles
In 1996, the fledgling portal Yahoo.com made its stock-market debut. This was during a time of great excitement--as well as uncertainty--about the prosperous "new economy" that the rapidly expanding Internet promised. By the beginning of the year 2000, Yahoo shares were trading at $240 each. Exactly one year later, however, Yahoo's stock sold for only $30 per share.
The modern industrial economies experience significant swings in economic activity. In some years most industries are booming and unemployment is low; in other years most industries are operating well below capacity and unemployment is high. Periods of economic expansion are typically called booms; periods of economic decline are called recessions or depressions. The combination of booms and recessions, the ebb and flow of economic activity, is called the business cycle.
Recessions
One of the most popular definitions of recessions is that they are periods when real gross national product (GNP) has declined for at least two consecutive quarters. In 1990, real GNP declined between the third and fourth quarters and again between the fourth quarter of 1990 and the first quarter of 1991. Hence, there is general agreement that a recession did occur.
Great Depression
A worldwide depression struck countries with market economies at the end of the 1920s. Although the Great Depression was relatively mild in some countries, it was severe in others, particularly in the United States, where, at its nadir in 1933, 25 percent of all workers and 37 percent of all nonfarm workers were completely out of work. Some people starved; many others lost their farms and homes.
Bubbles
In 1996, the fledgling portal Yahoo.com made its stock-market debut. This was during a time of great excitement--as well as uncertainty--about the prosperous "new economy" that the rapidly expanding Internet promised. By the beginning of the year 2000, Yahoo shares were trading at $240 each. Exactly one year later, however, Yahoo's stock sold for only $30 per share.