BUSINESS CYCLE GRAPH MINIPROJECT 1. 2. 3. 4. 5. 6. 7. GET A PIECE OF BLANK PAPER AND A VARIETY OF COLORED PENCILS.

paper: a. Why do you think the expansion on your chart is divided between a recovery and prosperity? How do you find the start of prosperity? b. How long must a contraction last before it is considered a recession? 10. (6 points) On your graph, place the following economic indicators in the correct location. The up arrows and down arrows do not go together as a group. Place each in its own spot. CPI (Inflation Rate) Unemployment Rate Real GDP

CPI (Inflation Rate) Unemployment Rate 11. (6 points) Based on your placements in #10, answer the following questions on the back of your graph: a. During what phase of the Business Cycle graph would the government be worried about inflation? b. Fiscal Policy is the power of Congress to increase or decrease taxes and increase or decrease government spending. When the government is worried about inflation, tell whether you think they should increase or decrease taxes. Tell whether you think

they should increase or decrease government spending. c. Monetary Policy is the Federal Reserve Banks power to increase or decrease the supply of money in the economy. One of the main ways the Federal Reserve Bank does this is by increasing or decreasing interest rates. When the Federal Reserve Bank is worried about inflation, tell whether you think they should increase or decrease the money supply. Tell whether you think they should increase or decrease interest rates.

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