Reasons for Business Cycles (Grade 10 NSC Matric Economics): Flashcards
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Business cycles
Business cycles
Natural ups and downs in economy over time
Exogenous reasons
Exogenous reasons
External factors from outside country's economy
Endogenous reasons
Endogenous reasons
Internal factors originating within the economy
Psychological reasons in business cycles
Psychological reasons in business cycles
Self-fulfilling prophecy: expectations influence outcomes
Aggregate demand formula
Aggregate demand formula
Components of aggregate demand
Components of aggregate demand
Consumption, Investment, Government spending, Net exports
Aggregate supply (AS)
Aggregate supply (AS)
Total goods/services businesses produce at different prices
Monetary policy
Monetary policy
Central bank actions influencing economy via interest rates
High interest rates effect
High interest rates effect
Discourages borrowing, investment, and economic activity
Low interest rates effect
Low interest rates effect
Encourages borrowing, investment, and economic expansion