Chapter 11
The Ups and Downs of the Business Cycle
In This Chapter
• The nature of the business cycle
• Causes of expansions and recessions
• Unemployment, inflation, and the economy
The forces of supply and demand play themselves out in the economy in ways that tend toward equilibrium but never quite get there. Over the very short term or in very specific areas of the economy, supply, demand, employment, unemployment, wages, and prices may remain somewhat steady. That can create the impression that a kind of equilibrium has been reached. But the short term, by definition, never lasts long, and here we are focusing on the economy as a whole.
The economy as a whole is always either growing or contracting at a rate that usually changes ...

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