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Business Cycles, Recession and Economic stimulus package

Economic Outlook Symposium W. A Strauss and E Engle 2009 Chicago Fed Letter, Federal Reserve Bank of Chicago

1. Define a recession and reasons why a recession might occur? Use Strauss article.

2. Do you believe in business cycles? What factors are necessary for an expansion to occur?

3. What might your opinion on Preseident Obama's stimulus package? Is it positive or negative and how does it effect the economy?

Solution Preview

The advent of recession occurs in a sequence based on fluctuations in real output and expenditures. In other words, recession is a decline in real output that lasts for six moths or more. The longer the period of declining real output, the more serious its effects.

Business cycles are a major part of economy. A sustained rise in real output, known as period of expansion (recovery) is followed by an extended period falling real output (contractions). These rise and falls in real outputs constitute a pattern known as the business cycle. Even ...

Solution Summary

Solution provides answers to these questions:
1. Define a recession and reasons why a recession might occur?

2. Do you believe in business cycles? What factors are necessary for an expansion to occur?

3. What might your opinion on Preseident Obama's stimulus package? Is it positive or negative and how does it effect the economy?

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