GDP and The Business Cycle

Amanda Ellington and Peyton Cook

GDP

Gross Domestic Product is the value of all final goods and services produced during a particular year or period adjusted to eliminate the effects of changes and prices.

GDP=Consumption + Government Expenditures + Investment + Exports - Imports

The Business Cycle

Is the expansion, contraction and recovery in the economy. It is measured in GDP and in Unemployment. GDP rises and employment shrinks during the expansion phases while reversing in periods of recession. Where ever one starts in the cycle, the economy is observed to go through 4 periods expansion, peak, contraction, and trough.