Causes And Disadvantages Of Macroeconomics

The topic of macroeconomics as a whole is very concerned with Business cycles. Short-term fluctuations in this business cycle often called booms and busts are what economist use to study macroeconomics as a whole. In turn these cycles are important to economist because they show the relationships that exist between markets. As the textbook states “What happens in one market is not usually independent from other markets, as we saw...during and after the recession of 2007–2009”( Chiang, MacMillan Publishers). As all this goes into the definition of a business cycle also stated in the textbook, is defined as “as alternating increases and decreases in economic activity” As this can be broken down into peaks, recessions, troughs, recoveries, all

With the definition in mind the important characteristics that have to be considered are as followed, the unemployment rate usually rises quickly. As well as a low inflation rate during this period. Along with a general rule that a recession must last two consecutive quarters or more but has to be less than three years. Consumer demand also becomes very low is this period as the consumers have low purchasing power, uncertainty about economics conditions, and consumers tend to

In the recovery period that began in March of 2010 until late 2017 there were 188,000 jobs added per month across the market. In the first four years however, there was over nine million jobs created (Center on Budget and Policy Priorities).As this move towards bringing down unemployment brought the actual GDP much closer to the potential GDP. The recovery period after the 1980s recession however there was a nearly 10 million jobs created in the first three years of the recovery period therefore, the recovery period in regards to jobs created was much faster in the 1980s