The concept of the economic cycle and the use of a range of economic indicators to identify the various phases
Economies move through a repeating pattern of fast growth, slowdown, and recovery called the economic cycle. Economists use data on GDP, unemployment, and inflation to identify which phase an economy is currently in.
Real World
The UK met the technical definition of recession in 2023 — two consecutive quarters of negative GDP growth — while unemployment remained relatively low, illustrating how different indicators can send mixed signals about the cycle's phase.
Exam Focus
Know the precise definition of recession (two consecutive quarters of negative GDP growth) — using it accurately in answers can be worth a standalone mark.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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