1. Business Cycles and Fluctuations. Chapter 14.

9. Unemployment and the Business Cycle.

10. THE BUSINESS CYCLE Phases of the Business Cycle PEAK Level of business activity Time RECESSION TROUGH RECOVERY GROWTH TREND

17. Banks Still Fail Today.

25. Unemployment Rates for Various Groups

27. UNEMPLOYMENT Measurement of Unemployment, 2002 Total Population 288,600,000 Labor force 142,500,000 74,700,000 71,400,000 8,300,000 134,200,000 Employed Not in labor force Under 16 and/or institutionalized Unemployed

28. The U.S. Unemployment Rate Since 1900

32. Inflation. Creeping or normal inflation. 1-3 percent a year. Why must we have some inflation for a healthy economy? Galloping inflation. 100-300 percent per year. Hyperinflation or 500 percent a year.

33. Consumer Price Index Since 1913

34. CPI Since 1913 – Annual Percentage Change

35. Inflation Across Countries Inflation Rates in Major Economies Have Trended Lower Over the Past Two Decades

43. Causes of Inflation? “TOO much money chasing TOO few goods and services.”

44. Inflation Causes Continued…. Cost-Push inflation. Demand-Pull Inflation.